IIX and DBS Bank has priced the world's first social sustainability bond to be listed on Singapore Exchange. Dubbed as the Women's Livelihood Bond (WLB), the US$8 million bond provides loans to social enterprises and microfinance institutions aimed to impact more than 385,000 women in Cambodia, the Philippines and Vietnam.
The four-year bond offers a coupon rate of 5.65% per annum. According to the two groups, the WLB received over 60% of its investment capital from Asian investors, with the majority being high net worth customers of DBS. The bond is equipped with credit protection features including US$500,000 first-loss capital from IIX, as well as a 50% guarantee of the principal amount of the underlying loan portfolio provided by USAID.
Additionally, the WLB is being backed by a diverse range of stakeholders from the public and private sectors. Some of its supporters are Shearman & Sterling, Hogan Lovells, the Rockefeller Foundation, US Agency for International Development (USAID), the Clinton Global Initiative, ANZ Banking Group, the Japan Research Institute, and the Australian Department of Foreign Affairs and Trade.
IIX Founder Durreen Shahnaz said the closing of the bond is a landmark achievement for the impact investment market.
"The infrastructure for social capital markets is now taking off. This transaction brings us one step closer to a day when our financial markets consider the social and environmental impact on an equal footing with financial returns," he said in a media statement.
Meanwhile, DBS Foundation Head Leona Tan noted how the bank has played an active role in bringing the WLB to fruition as it steps up with its commitment to promoting sustainable development in Asia.
"As the former Development Bank of Singapore, DBS' core belief is that business should touch real people, real businesses, real lives. We are a big believer of sustainable development, and are a supporter of the UN Sustainability Goals which seek to create decent work and economic growth, among other things," she expressed.