KUALA LUMPUR: CIMB Bank Bhd is issuing bonds worth US$680 million (RM2.85 billion) to fund projects related to the United Nations’ sustainable development goals (SDGs).

The bonds — a five-year floating rate note priced at a spread of 78 basis points above the three-month US dollar London Interbank Offered Rate (Libor) — will be issued on Oct 9 under CIMB Bank’s existing US$5 billion Euro Medium-Term Note Programme, the group said in a statement yesterday.

The banking group said the bonds were well received, with banks taking up more than 76% of them while the rest were subscribed by securities firms and fund managers. Applications will be made to list the SDG bonds on Bursa Malaysia, Singapore Exchange Securities Trading, and the Taipei Exchange, it added.

“We are pleased with the success of this maiden SDG Bond transaction, as we aim to be a catalyst for real action and visible shaper of sustainability practices in Asean,” CIMB group chief executive officer Tengku Datuk Seri Zafrul Aziz said in the statement.

“The business case for sustainability makes perfect sense: to close the gap in sustainable development and infrastructure, the world needs around US$2.5 trillion, two-thirds of which is estimated to be provided by banks. In other words, there is a huge opportunity out there and CIMB is well positioned to capture these opportunities,” he said.

CIMB said the bonds are aligned with the global best practices and benchmark for sustainability bond principles, including the social bond principles, sustainability bond guidelines 2018 and the Asean sustainability bond standards.

This is the first ever SDG bonds to be issued by a Malaysian and Asean issuer in the Reg S international capital markets, as well as in the Formosa market.