The year 2022 was undoubtedly one of toughest for capital markets transactions in decades. Several banks and securities companies reported lower revenues due to shrinking underwriting fees as a result of the lower volume of debt and equity capital deals. According to Refinitiv, an LSEG business, fees from underwriting equity capital market transactions in Asia, outside of Japan and Australia, fell 34.1% to US$6.83 billion in 2022 from US$10.37 billion in the previous year. On the other hand, fees from underwriting bond offerings declined by 8.4% to US$12.95 billion from US$14.14 billion during the same period.
Amid such a challenging market environment, sustainable finance-related deals emerged as a significant driver of issuers’ and investors’ behaviour. This was evident in several fund raisings that defined the best issuers The Asset board of editors selected for The Asset Triple A Sustainable Capital Markets Awards 2022.
The Republic of the Philippines (RoP) is voted as the Sovereign Issuer of the Year on the back of its three sustainability bonds that it priced in 2022, including its debut offering in March. The sovereign printed a US$1 billion deal for 25 years issued under the RoP’s sustainable finance framework as part of a three-tranche transaction totalling US$2.25 billion. This demonstrated the government’s commitment to achieving sustainable development and mitigating climate change, notably the pledge to reduce RoP’s greenhouse gas emissions by 75% by 2030.
Then in April, the sovereign accessed the Samurai bond market with a four-tranche sustainability bond issuance totalling 70.1 billion yen (US$530 million) – the first-ever Asean sustainability bond issued by the RoP.
And for the third time in 2022, the RoP raised another sustainability bond in October amounting to US$750 million, also for 25 years. This was part of the three-tranche deal totalling US$2 billion, which was the first offshore bond offering under the new administration of President Ferdinand Marcos Jr.
The award for Best Quasi-Sovereign Issuer goes to Housing & Development Board (HDB) of Singapore, a statutory board set up to provide affordable and quality housing. It issued its inaugural green bond in March 2022 amounting to S$1 billion (US$755 million), representing its first step into green financing. The proceeds were allocated exclusively to fund HDB’s green building projects under its new green finance framework as it seeks to reduce energy consumption and cut carbon emissions in its development projects under the Singapore Green Plan 2030’s energy reset pillar.
HDB followed this debut issuance with two more green bond deals – one in July amounting to S$1.1 billion, which was upsized from the initial amount of S$700 million, and the other in October amounting to S$1.2 billion.
Among other issuers, leading polyester recycling company Far Eastern New Century Corporation (FENC) of Taiwan is chosen as the Corporate Issuer for North Asia as it arranged two sustainable types of financing in 2022. In June, the company concluded the first blue loan in Taiwan with DBS Bank Taiwan amounting to NT$1 billion (US$33 million), helping FENC recycle more marine waste and implement ocean protection projects. The loan enables company to devote itself more to ocean-friendly and water-resource protection initiatives, in alignment with the UN Sustainable Development Goals.
Then in September, FENC signed its first sustainability-linked bond amounting to NT$2.5 billion underwritten by Yuanta Securities. The offering featured sustainability performance targets aimed at reducing greenhouse gas emissions by 20% by the end of 2025 compared to 2020 and increasing the green product revenue by 80% by the end of 2025 compared to 2015.
The Philippines’ leading renewable energy platform ACEN Corporation is selected as Corporate Issuer for Southeast Asia on the back of the innovative Energy Transition Mechanism (ETM) transaction and its first fund raising in the domestic bond market. The 17.4 billion pesos (US$320 million) ETM deal is the first transaction of its kind in the Philippines designed for the early retirement of the South Luzon Thermal Energy Corporation coal plant in 2030 – or 15 years ahead of its full technical life.
In September 2022, the company raised 10 billion pesos in Asean green bond following its US$400 million undated fixed-for-life green note issuance in September 2021.
India’s multinational conglomerate Reliance Industries is voted as the Corporate Issuer for South Asia as it embarked on a series of fund raising across multiple debt capital markets and currencies in 2022. These included the landmark multi-tranche offering of US$4 billion senior unsecured notes in January, representing the largest foreign currency bond deal out of India. The transaction included the first-ever 40-year bond by a BBB-rated private sector corporate from non-Japan Asia amounting to US$750 million.
Reliance’s fund raising also included US$1.5 billion syndicated term loans to fund growth capital expenditures and an US$800 million equivalent green loan acquisition financing for solar panel manufacturer REC Solar Holdings.
Bank of China (BoC), meanwhile, is once again cited as the Financial Institution Issuer of the Year as it continued to be at the forefront of sustainable fund raising in the region through its various global branches. For instance, the bank, through its Paris branch, printed in November 2022 the world’s first US dollar-denominated biodiversity-themed green bond, and the first diversity-themed green bond in Europe amounting to US$400 million.
Earlier in February, the BoC branches in Sydney, Johannesburg and Hungary raised a total of US$1 billion in sustainability and green bonds that generated a strong investor demand.
Indeed, such focus now makes sustainable finance a major component of bank operation and it has evolved from just financing renewable energy projects to encompass almost all businesses and sectors as enterprises set their environmental, social and governance (ESG) targets for net-zero commitments.
ESG Bank of the Year
Several banks are nominated for the much-coveted ESG Bank of the Year. Despite the rising interest rate environment, BNP Paribas rose to the challenge, supporting its clients in their sustainability initiatives. Its expertise in capital markets, syndicated loans, onshore and offshore distribution as well as its ability to commit its own resources help the bank deliver for clients from across financial institutions, technology, green mobility, infrastructure and beyond in 2022.
Citi is among the leading sustainability finance framework advisers, and executes sustainability finance transactions for its corporate clients, sovereigns and financial institutions. It has taken a leadership role in helping issuers and borrowers across various sectors embark on their ESG financing journey as it promotes best practices in the ESG loan market. The US bank is expanding efforts in sustainable financing by helping investors reposition their portfolios towards greener industries and helping corporates realign their business models.
Crédit Agricole CIB is among the leaders in arranging sustainable finance transactions in Asia-Pacific and in developing green banking in the region. It acted as adviser in the first-ever onshore green triparty repos, provided value-added ESG services to perform holistic ESG rating analysis, and was involved in pioneering Common Ground Taxonomy transactions in the green bond market.
DBS is at the forefront of efforts in developing sustainable debt capital markets regionally. It advises and assists many issuers/borrowers in setting up their sustainable financing and sustainability-linked financing framework, and has brought many first green/sustainability-linked/transition bond deals to the market. The bank’s ESG advisory team works closely with clients on the process and tools required to execute a sustainable finance transaction, including setting up a sustainable financing framework and obtaining an ESG rating.
HSBC is among the leaders in the development of the ESG-related debt market in Asia, doing value-added structuring work and bringing inaugural structures to the market. It has secured several mandates to structure ESG-related bond transactions and has consistently brought first-time issuers to the market as it drives market development in the region. It was involved in the first-ever double ESG structure – green and sustainability-linked bond – in Asia, outside of Japan, the US$230 million deal for Yunnan Provincial Energy Investment Group priced in April 2022.
MUFG Bank is committed to accelerating Asia’s green economy and supports Asia's transition journey by deepening engagements with clients in sectors that are hard to decarbonize, such as agriculture, energy and chemical sectors.
As part of MUFG’s efforts to expand its capabilities in providing ESG financing, the bank established its ESG financing department under its Asian investment banking division in April 2021. The formation of the team was completed in the first half of 2022, and the team now oversees the origination and execution of ESG financing transactions across the entire Asia-Pacific, outside of Japan.
Société Générale accelerates the alignment of its energy sector portfolio with its support for energy transition. As part of its commitment to align its portfolios with trajectories compatible with the goal of global carbon neutrality by 2050, the bank sets itself new intermediary targets, including reducing the carbon intensity of its exposure to the power generation sector. Société Générale has set for itself a new target of contributing €300 billion (US$323 billion) to sustainable finance by 2025, involving all its businesses in both environmental and social objectives.
For the other major award for Best bank, the nominees are Citi, DBS and HSBC.
For the complete list of Best issuers, please click here.
For the complete list of Best banks and Best advisers winners/nominees, please click here
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