Ascendas Reit raises S$100m from maiden green bond

ASCENDAS Real Estate Investment Trust (Ascendas Reit) has raised S$100 million through the issuance of its first green bond under a newly established green finance framework.

The 10-year bond carries a fixed coupon rate of 2.65 per cent, and will be issued under the trust's S$7 billion euro medium-term securities programme.

The order book was in excess of S$650 million, with orders from across 47 accounts, Ascendas Reit's manager said in a press statement on Monday night.

The green bonds were allocated to asset managers, insurance companies and hedge funds (80 per cent), banks and corporates (11 per cent) and private banking accounts (9 per cent).

William Tay, chief executive and executive director of the Reit's manager, said the launch of the green finance framework reinforces its commitment towards the sustainability strategy to improve the environmental performance of its portfolio.

"The proceeds from our green bonds or loans will allow us to finance green projects that mitigate climate change by reducing greenhouse gas emissions, improving energy efficiency, reducing water consumption or having other positive environmental impact," Mr Tay added.

OCBC Bank was the sole lead manager, bookrunner and green finance adviser for the transaction.

Tan Kee Phong, head of capital markets at OCBC Bank, added: "Sustainability has become a key consideration for the market, and this has helped green financing gain traction over the last few years.

"What is even more encouraging is the success of this issuance amidst challenging economic conditions as it shows the resilience in investor appetite for such products."

Net proceeds from the bond will be used to refinance 17 green properties in Ascendas Reit's portfolio, selected based on the eligibility criteria in the green finance framework. These properties include ONE@Changi City, Nexus@one-north and Aperia.

Ascendas Reit owns 34 properties in its Singapore portfolio with BCA Green Mark certifications, the largest number among Singapore Reits. The manager said it will continue its support of the Bulding and Construction Authority's Green Mark scheme.

Units of Ascendas Reit fell S$0.03 or 0.9 per cent to close at S$3.41 on Monday, before the announcement.