CHIMEI Corp (CHIMEI, 奇美實業) on Wednesday issued Taiwan’s first sustainability-linked bond (SLB) on the Taipei Exchange.
Arranged and underwritten by CTBC Bank (中國信託銀行), the SLB was oversubscribed and marked a new milestone in the domestic bond market’s sustainable development.
CHIMEI’s SLB was issued in support of the Financial Supervisory Commission’s sustainable development policy. The unsecured corporate bond has a five-year maturity, 1.65 percent coupon rate and total issue size of NT$1 billion.
Photo courtesy of CTBC Bank
It is the first certified SLB since the Taipei Exchange Operation Directions for Sustainable Bonds was announced in July.
Attending the listing ceremony along with CHIMEI president Chao Lin-yu, CTBC Bank vice chairman Austin Chan said he was confident that the bond would have a positive impact on environmental sustainability and development.
In particular, the bond would bridge the gap between capital market and corporate sustainable development goals while also practically facilitating CHIMEI’s sustainable development and increasing the variety of sustainable bonds to investors, Chan said.
The coupon rate of the bond is determined by two CHIMEI sustainability performance targets based on the Science Based Targets initiative: reducing greenhouse gas emissions (Scopes 1 and 2) by 16.8 percent by 2025 from 2021 levels, and raising the portion of water reuse in its manufacturing processes to 80 percent by 2025.
If the targets are not met, as determined by a third party, the bond’s coupon rate will increase to benefit investors’ interest income.
CHIMEI’s Chao said the SLB highlighted how the company uses innovative solutions and concrete actions to realize its long-term commitment to environmental sustainability worldwide.
Moving forward, CHIMEI will continue to seek opportunities to bring supply chains and financial institutions together to the benefit of environment, to actively implement “Clean and Green” sustainable development, and to strive for net-zero emissions with partners worldwide, he said.
The SLB was conducted based on the Sustainability-Linked Bond Principles of the International Capital Market Association. The positive market feedback it received reflects investors’ satisfaction with CHIMEI’s business performance over the years and trust in its responsible investment and environmental protection efforts, the company said.
Serving as the sole arranger of CHIMEI’s SLB is the latest sustainability milestone for CTBC Bank, following the successful transactions of Taiwan’s first green bond, first sustainability bond and first social bond.
The bank said that going forward, it would continue to be a strong supporter of Taiwan’s bond market by expanding its financial services in sustainable finance, developing sustainable fundraising and investment products, and assist in achieving clients’ sustainability goals.
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