Taiwan banks to issue green bonds for first time

2017/05/18 18:16:44 fontsize-small fontsize-default fontsize-big
Taiwan banks to issue green bonds for first time

Taipei, May 18 (CNA) Four Taiwanese banks will begin issuing green bonds Friday in the first such move in the country, the Taipei Exchange (TPEx) said Thursday.

The green bond initiative is aimed at showing corporate responsibility with regard to environmental protection, with the proceeds going toward funding environmentally friendly projects, said the TPEx, which operates the local bond market.

The four banks -- CTBC Bank (中信銀), E. Sun Commercial Bank (玉山銀), KGI Bank (凱基銀) and Bank SinoPac (永豐銀) – will list Taiwan's first green bonds, totaling NT$5.17 billion (US$171 million), on the over-the-counter market, the TPEx said.

CTBC Bank and KGI Bank will each issue NT$1 billion in green bonds, with a maturity period of three years and coupon rates of 0.83 percent and 0.90 percent, respectively, the TPEx said.

E. Sun Bank and Bank SinoPac, meanwhile, will issue U.S. dollar-denominated green bonds of US$60 million and US$45 million, respectively, with a 30-year maturity period, the TPEx said.

While those two tranches will have a zero coupon rate, they will offer a 4.10 percent and 4.50 percent internal rate of return (IRR), respectively, according to the TPEx.

The funds raised from the four green bond sales will be used by the issuing banks to extend loans for renewable technology development projects, including solar energy and wind energy projects, the TPEx said.

It said the decision to issue green bonds was a response to the Taiwan government's efforts to encourage for technology development in areas such as green energy, biotechnology, and smart machinery.

The funds raised by the four banks are expected to help make local industries more sustainable and globally competitive by offering then cheaper funding, the exchange said.

(By Han Ting-ting and Frances Huang)

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