HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) has approved two sustainability-linked loans totaling NT$450 million (US$15.55 million) for Taya Group (大亞集團) and Sinbon Electronics Co (信邦電子), the bank said yesterday, adding that interest rates would fall if the borrowers’ sustainability performance improves.
Those marked the first sustainability-linked loans granted by HSBC Taiwan, it said.
While HSBC Taiwan has experience providing green loans for the nation’s developers of renewable energy sources to support their projects, the bank began focusing on sustainability-linked loans to meet rising demand from companies in other sectors planning to undertake sustainability programs, it said.
“As we reward our clients who reach their goals of sustainability development with special incentives, such as lower interest rates, many clients are more interested in taking out sustainability loans instead of regular corporate loans,” commercial banking head Stanley Hsiao (蕭仲程) told the Taipei Times by telephone.
HSBC Taiwan discusses their targets with the borrowers before approval, and assigns independent institutions to review and check if the borrowers meet their targets the following year, the bank said.
Taya Group, an electrical wire and cable provider that is expanding into the green energy sector, aims to use the loans to increase its solar power generation and reduce greenhouse emissions annually, and build a photovoltaic power plant in Tainan, the bank said.
Given that Taya would sell electricity to state-run Taiwan Power Co (台電), the bank would review the utility’s documents to confirm that Taya’s power generation rises next year, it said.
Sinbon, which produces cables, connectors and modems, aims to deepen its operations in the green energy sector by providing more key components to solar and wind power developers, and electric-vehicle companies, it said.
HSBC Taiwan said it would reduce the interest rate on Sinbon’s loan if the revenue generated from the sale of green energy-related products account for a greater share of the company’s overall sales and if its corporate social responsibility performance rises.
The companies took out the loans for terms of one to two years, the bank said, adding that an interest rate reduction could happen next year at the earliest.
However, they must first pass examinations by a third-party institution, such as France-based EcoVadis SAS, it said.
Receiving a sustainability-linked loan has been an important step for Taya to help improve its environmental, social and governance performance, Taya chairman Ryan Shen (沈尚弘) said in a statement.
Sinbon has been investing in green energy over the past three years and the loan is an opportunity to highlight its sustainability agenda, chairman Joseph Wang (王紹新) said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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