IIX and DBS close world’s first listed social sustainability bond
USD8 million Women’s Livelihood Bond impacts the lives of over 385,000 women
SINGAPORE,06 July 2017 -
IIX (Impact Investment Exchange), a pioneer in impact investing and catalyst to social innovation, with the support of DBS Bank, has closed the world’s first social sustainability bond to be listed on a stock exchange, the Women’s Livelihood Bond (WLB). This innovative USD8 million bond provides loans to social enterprises and microfinance institutions, positively impacting the livelihoods of more than 385,000 women in Cambodia, the Philippines and Vietnam.
The four-year bond offers a coupon rate of 5.65% per annum and is listed on the Singapore Exchange. The WLB received over 60% of its investment capital from Asian investors, with the majority being high net worth customers of DBS. The WLB includes a number of credit protection features, including USD500,000 of first-loss capital provided by IIX as well as a 50% guarantee of the principal amount of the underlying loan portfolio, provided by USAID.
In addition to DBS, the WLB is supported by a diverse range of stakeholders from the public, private, and philanthropic sectors such as Shearman & Sterling, Hogan Lovells, the Rockefeller Foundation, U.S 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 intends to replicate the WLB across the globe and expects such future bonds to be listed on its Impact Exchange.
“The closing of the Women’s Livelihood Bond is a landmark achievement for the impact investment market, demonstrating that impact investment products can achieve scale, transparency and liquidity and appeal to a wide range of investors,” said IIX’s Founder, Durreen Shahnaz. “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 social and environmental impact on an equal footing with financial returns.”
“The WLB has brought in new stakeholders to the impact investment space thus expanding the ecosystem that supports transformative growth. At IIX, we are delighted to work with new partners such as DBS Bank, Shearman & Sterling, Hogan Lovells and ANZ Bank who have helped in supporting our efforts to create this innovative financial structure for social good. We look forward to bringing-in new partners into this exciting space of impact investing,” said Robert Kraybill, IIX Managing Director.
DBS played an active role in bringing the WLB to fruition, in line with its commitment to promoting sustainable development in Asia. This includes championing the creation of social innovation and social enterprises through the DBS Foundation, as well as supporting financial inclusion for many segments of society.
Said Leona Tan, Head of DBS Foundation and a member of DBS Sustainability Council, “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. The WLB, and other similar instruments, will contribute towards these goals by providing social enterprises with the needed capital to build and scale their businesses, thereby creating jobs and strengthening livelihoods here in Asia.”
Clifford Lee, DBS Group Head of Fixed Income said: “This is a good example of how the capital markets can be mobilised to support a worthwhile cause for the betterment of life for the less fortunate, and we are honored to have been involved in the structuring and marketing of this debut transaction for IIX.”
Tan Su Shan, DBS Group Head of Consumer Banking/Wealth Management added: “We would like to acknowledge the support of our clients, who helped to make the WLB a reality. With Asia’s entrenched culture of giving, we see the WLB as a testament to the tremendous potential of impact investing in this region. Singapore is well-placed to become a regional hub for impact investing, leveraging the infrastructure and eco-system it has built as a leading hub for tech start-ups and tapping on the region’s unique intersection of wealth and socio-environmental needs. The WLB is a modest but important first step and we will continue to work closely with partners like IIX to bring innovative financial instruments to investors in Asia who are seeking to combine social and financial returns.”
DBS is a leading financial services group in Asia, with over 280 branches across 18 markets. Headquartered and listed in Singapore, DBS has a growing presence in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings, is among the highest in the world.
DBS is at the forefront of leveraging digital technology to shape the future of banking, and has been named “World’s Best Digital Bank” by Euromoney. The bank has also been recognised for its leadership in the region, having been named “Asia’s Best Bank” by several publications including The Banker, Global Finance, IFR Asia and Euromoney since 2012. In addition, the bank has been named “Safest Bank in Asia” by Global Finance for eight consecutive years from 2009 to 2016.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. The bank acknowledges the passion, commitment and can-do spirit in all of our 22,000 staff, representing over 40 nationalities. For more information, please visit www.dbs.com.
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