IIX and DBS Unite To List S$11 Million Women's Livelihood Bond on SGX
Bridge the gap: IIX and DBS work together to list the world's first social sustainability bond on stock exchange to impact lives of women.
Singapore-based impact enterprise Impact Investment Exchange (IIX) with the support of DBS Bank has priced a US$8 million (S$11 million) bond to positively influence the lives of more than 385,000 women in Southeast Asia, specifically in Cambodia, the Philippines and Vietnam.
As the world's first social sustainability bond to be listed on stock exchange, the four-year Women's Livelihood Bond (WLB) holds a coupon rate of 5.65% per annum. More than 60% of the bond's investment capital comes from Asian investors, the majority being high net worth DBS customers.
"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 WLB covers credit protection features with US$500,000 of first-loss capital provided by IIX, including a 50% guarantee of the principal amount of the underlying loan portfolio provided by US Agency for International Development (USAID), said DBS.
In addition to DBS, other stakeholders range from public, private and philanthropic sectors: Shearman & Sterling, Hogan Lovells, the Rockefeller Foundation, the Clinton Global Initiative, ANZ Banking Group, the Japan Research Institute, and the Australian Department of Foreign Affairs and Trade.
Shahnaz continued, "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 active role of DBS has led WLB to fruition, instigating sustainable development in Asia — from championing the creation of social innovation and social enterprises through the DBS Foundation to supporting financial inclusion for many segments of society.
Tan Su Shan, DBS Group Head of Consumer Banking/Wealth Management views Singapore as 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," she added.