Singapore’s latest 50-year green bond issuance closes at 2.16%, down from 2.62%
This is down from 2.62% in last year’s issuance
[SINGAPORE] The auction for Singapore’s fourth tranche of 50-year sovereign green bonds closed with a cut-off yield of 2.16 per cent, down from the 2.62 per cent yield in the previous issuance the year before.
This is reflective of the broader interest-rate environment, with rates in the Republic plummeting significantly over the past year, said Cyrus Ng, senior research analyst at Bondsupermart. This includes the yields for short-tenor Treasury bills.
The reopening of the 50-year green debt, known as the Green Singapore Government Securities (Infrastructure) Bonds, received S$1.7 billion in applications for an allotted amount of S$1 billion, bringing the bid-to-cover ratio to 1.74, results showed last Friday (Sep 26). This was largely in line with the results of the 30-year sovereign green bonds reopened in April, which had a bid-to-cover ratio of 1.84.
This suggests that demand for ultra-long Singapore Government Securities remains persistent, Ng noted.
All non-competitive applications were allotted in the latest auction, totalling about S$54.1 million, the Monetary Authority of Singapore’s website indicated. The rest were competitive bids, of which about 92 per cent were allotted at the cut-off yield.
Ng attributed the falling rates in Singapore to reasons including its reputation as a safe-haven market, which contributes to fairly flush domestic liquidity.
A NEWSLETTER FOR YOU
Friday, 12.30 pm
ESG Insights
An exclusive weekly report on the latest environmental, social and governance issues.
The yield curve as a whole has steepened, meaning that yields of long-dated bonds are rising more quickly than those of shorter-tenor ones, leading to lower demand.
The latest issuance of 50-year green bonds has a coupon rate of 3 per cent and a maturity date of Aug 1, 2072. They are expected to be issued on Oct 1, with coupon payments disbursed on the first day of February and August every year, until maturity or when they are redeemed.
Including this tranche, Singapore has issued S$7.7 billion of 50-year sovereign green bonds under the Singapore Green Bond framework. Meanwhile, the two offerings of 30-year sovereign green bonds totalled S$4.3 billion.
SEE ALSO
The government said that up to S$35 billion of sovereign and public-sector green bonds will be issued by 2030. Thus far, S$12 billion of sovereign green bonds have been issued.
A key feature of these bonds is that the proceeds will be used to finance aspects of the Singapore Green Plan 2030, including two new MRT lines – the Jurong Region Line and the Cross Island Line.
Copyright SPH Media. All rights reserved.
