Sabana Industrial REIT launches $100m sustainability bonds

The bonds have a coupon rate of 4.15%.

Sabana Real Estate Investment Management Pte. Ltd., the manager of Sabana Industrial REIT, has successfully launched $100m in five-year senior unsecured Sustainability-Linked Guaranteed Bonds due 2029.

In a statement, the group said this will be the first of its kind in Asia for Singapore dollar-denominated CGIF-guaranteed sustainability-linked bonds aligned with ASEAN standards and issued by an industrial REIT.

CIMB Bank Berhad, Singapore Branch, acted as the sole global coordinator for the bond issue, with CIMB Bank Berhad, Singapore Branch, and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, serving as joint lead managers/bookrunners and joint sustainability linked bond structuring advisors.

The bonds were priced competitively with a coupon rate of 4.15% per annum and benefit from an unconditional guarantee by CGIF, a trust fund of the Asian Development Bank, which holds a credit rating of AA from Standard & Poor’s. This covers the payment obligations under the Bonds and the bond trust deed.

Proceeds from the issuance will fund Sabana Industrial REIT’s strategic initiatives, including capital expenditures for acquiring new properties and enhancing existing assets within the group, as well as refinancing existing term loans, including those facilitated by the joint lead managers.

Following the bond issuance, as of 31 March, Sabana Industrial REIT's weighted average borrowing tenor will extend to 3.5 years, compared to 2.7 years previously. Additionally, the hedge ratio is expected to rise to 80.1%, up from 51.8%, as of the same date. The REIT has no refinancing obligations until 2026, further securing its financial position in the market.