KBank to launch USD100-million sustainability bonds to finance green and social projects
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KASIKORNBANK (KBank) is the first Thai and ASEAN bank to issue sustainability bonds totaling USD100 million, where the proceeds will be used to finance green and social projects. Such bond issuance is aimed at supporting the development of Thai and regional capital markets and promoting investments that generate returns in parallel with driving sustainable growth of Thailand and global communities.
Mr. Banthoon Lamsam, Chairman of the Board of KBank, said KBank has adhered to the Sustainable Development concept in relation to the economic, social and environmental aspects as a foundation of its operations, to create maximum benefits for all stakeholders. Recently, KBank issued sustainability bonds totaling USD100 million for foreign investors, which has made KBank the first bank in Thailand and Southeast Asia to offer such bonds. The proceeds of bond issuance will be used to finance projects that will bring about environmental and social benefits in accordance with international standards set up by the International Capital Market Association (ICMA) and the ASEAN Capital Markets Forum (ACMF).
Sustainability bonds of KBank are senior, unsecured bonds, with floating interest rate based on LIBOR plus 0.95 percent. Under a five-year term, the maturity will be in 2023. The entire amount was offered to foreign institutional investors via KBank’s Hong Kong Branch. Related parties include BNP Paribas that acts as the Sustainability Bond Framework Structuring Advisor and Sole Lead Manager, and Sustianalytics – an independent global provider of ESG and corporate governance research – that has provided a second party opinion on the sustainability bond framework.
“Sustainability bonds of KBank are senior, unsecured bonds, with floating interest rate based on LIBOR plus 0.95 percent.”
Mr. Banthoon added that the success in the sustainability bond sale reinforces KBank’s core concept of sustainable development. The fact that the bonds were fully subscribed within only one day reflects KBank’s ability to create a balance between the return and the policy of the bond which is up to international standards, thus being widely accepted by institutional investors who have placed their trust in KBank. KBank is strongly confident that the issuance of the sustainability bonds – the first time in Thailand and in ASEAN – will set a new benchmark for domestic and regional capital markets. The initiative will be a prelude for the launch of capital products offering attractive returns to investors while also driving sustainable growth for the nation and the world.
KBank’s business operations are based on being a bank of sustainability under appropriate risk management, good governance and balance in economic, social and environmental dimensions. Given the adherence to the Sustainable Development concept, KBank is the first bank in Thailand and ASEAN that has been granted membership of the Dow Jones Sustainability Indices (DJSI) in both their DJSI World Index and DJSI Emerging Markets 2018 for the third consecutive year. In addition, KBank has been selected as a member of the FTSE4Good Emerging Index for three straight years.
At the national level, the Stock Exchange of Thailand has included KBank in the Thailand Sustainability Investment List 2018 (THSI List) and the SET THSI Index, the first-of-its-kind index in Thailand, among other 45 companies. In addition, KBank is the first and only commercial bank in the country that has been granted the Carbon Neutral Certification by Thailand Greenhouse Gas Management Organization (Public Organization).
Questions & Answers
Q.What kind of projects will KBank use the bond proceeds to fund?
What kind of projects will KBank use the bond proceeds to fund?
The proceeds from the sustainability bond issuance will be used to finance green and social projects. These projects aim to deliver environmental and social benefits in line with international standards.
Q.Who bought these sustainability bonds from KBank?
Who bought these sustainability bonds from KBank?
The entire amount of the bonds was offered to foreign institutional investors. The offering was conducted via KBank’s Hong Kong Branch, with the bonds being fully subscribed within a single day.
Q.Which organisations helped KBank structure and assess these bonds?
Which organisations helped KBank structure and assess these bonds?
BNP Paribas acted as the Sustainability Bond Framework Structuring Advisor and Sole Lead Manager. Sustainalytics, an independent global provider, provided a second party opinion on the sustainability bond framework.
Q.What is the maturity period and interest rate for KBank's sustainability bonds?
What is the maturity period and interest rate for KBank's sustainability bonds?
The bonds have a five-year term, with maturity set for 2023. They offer a floating interest rate based on LIBOR plus 0.95 percent, as senior, unsecured bonds.
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