IIX, DBS price new US$8m social sustainability bond to be listed on SGX

SINGAPORE'S DBS Bank and Singapore-based impact investing platform Impact Investment Exchange (IIX) have priced a US$8 million bond aimed at improving livelihoods of more than 385,000 women in South-east Asia.

Termed the Women's Livelihood Bond (WLB), this four-year bond offers a coupon rate of 5.65 per cent per annum, and is expected to be listed on the Singapore Exchange within a month, said DBS in a release on Thursday. If successful, the listing will make it the first such bond to be listed on a traditional stock exchange.

The WLB is structured to create a special-purpose vehicle of impact enterprise issuers, IIX said on its website. Through that vehicle, WLB raises funds from investors seeking financial and social returns. Proceeds will then be lent to social enterprises and microfinance institutions, so that they can help improve the lives of women in Cambodia, the Philippines and Vietnam.

The WLB includes a number of credit protection features, including US$500,000 of first-loss capital provided by IIX as well as a 50 per cent guarantee of the principal amount of the underlying loan portfolio, provided by US Agency for International Development (USAID).

The WLB received over 60 per cent of its investment capital from Asian investors, with the majority being high net worth customers of DBS, the bank said. The WLB is also supported by a diverse range of stakeholders from the public, private and philanthropic sectors such as the Rockefeller Foundation, the Clinton Global Initiative, ANZ Banking Group, the Japan Research Institute and the Australian Department of Foreign Affairs and Trade, to name a few.

IIX intends to replicate the WLB across the globe and expects such future bonds to be listed on its Impact Exchange, said the release.