Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

Frasers Commercial Trust / Equity Bottom-Up

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The rise of sustainable finance saw global sustainable debt issuance surpass US$700 billion in 2020. Investor focus on sustainable debt has expanded in recent years to include instruments such as sustainability-linked and social bonds, as well as green and sustainable-linked loans. While green or sustainability linked loan opens more avenues of funding, it also serves as a signal to investors on the firm’s commitment towards environment and sustainable business practices. 
	 </li>
	<li>
S-REITs and Property Trusts secured new or refinanced green and/or sustainability-linked loans since the start of 2020, totaling more than S$2 billion in loan, of which close to 54% are green loans and rest are sustainability-linked loans. 
	 </li>
	<li>In 2021, Far East Hospitality Trust, Manulife US REIT, Mapletree Logistics Trust, Mapletree North Asia Commercial Trust and Ascott Residence Trust have all secured green or sustainability-linked loans. Proceeds are mostly used to finance general working capital or green certified properties. </li>
</ul>
 

In 2020, global sustainable debt issuance surpassed US$700 billion, up from US$566 billion in 2019 (according to Bloomberg). The notion of sustainable debt, which started off with an initial focus on green bonds, has evolved tremendously in the last few years. The scope of sustainable debt has expanded to include instruments such as sustainability-linked and social bonds, as well as green and sustainable-linked loans.
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<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-03/Capture_11.PNG' alt='Global Sustainable Debt Issuance' />
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 <div class='content-caption'>Global Sustainable Debt Issuance</div>
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To encourage corporates to adopt sustainable business practices, provide them with access to green financing and anchor deep green finance expertise in Singapore, the Monetary Authority of Singapore (“MAS”) introduced a new Green and Sustainability-Linked Loan Grant Scheme (“GSLS”), effective since January 2021. The first of its kind globally, the GSLS supports corporates of all sizes to obtain green and sustainable financing by defraying the expenses of engaging independent sustainability advisory and assessment service providers to validate the green and sustainability credentials of the loan (click <a href="https://www.mas.gov.sg/schemes-and-initiatives/green-and-sustainability-linked-loans-grant">here</a> for more information on the GSLS).  
 

<ul>
<li>
Green loans are generally structured in the same way as standard loans except that proceeds from green loans are tracked and used for specific green projects which met certain benchmarked criteria.</li>
	<li>
Sustainability-linked loans generally do not restrict the use of proceeds but borrowers will have to commit to sustainability performance targets, and are awarded a reduction in interest rates if their sustainability targets are met. Therefore, sustainability-linked loans align companies to broad investor sustainability expectations and allow access to a wider range of companies who might not have specific green projects or funding needs. 
	 </li>
</ul>
While green or sustainability linked loan opens more avenues of funding, it also serves as a signal to investors on the firm’s commitment towards environment and sustainable business practices. 
As many as 12 Singapore REITs and Property Trusts have secured new or refinanced their green and/or sustainability-linked loans since the start of 2020 to 30 March 2021. Together, the 12 S-REITs obtained more than S$2 billion in loan amount, of which close to 54% are in the form of green loans while the other 46% are sustainability-linked loans. Recent green and sustainability-linked loans by Singapore REITs and Property Trust 
In March 2021, <a href="https://www.sgx.com/securities/equities/BTOU">Manulife US REIT</a> (“MUST”) obtained its first sustainability-linked loan of US$250 million from DBS and OCBC. Loan terms incorporate interest rate reductions linked to the achievement of predetermined sustainability performance targets, including efficient use of energy and water, and management of greenhouse gas (GHG) emissions, in relation to MUST’s nine office properties in the U.S. Back in May 2020, MUST also obtained its maiden green loan of US$100 million of which proceeds will be primarily used to refinance Peachtree, a 27-storey Class A office building located in Midtown, Atlanta. <a href="https://www.sgx.com/securities/equities/HMN">Ascott Residence Trust</a> (“ART”) also secured its maiden green loan in January 2021. The S$50 million five-year green loan from DBS made ART the first hospitality trust in Singapore to secure a green loan. ART noted that proceeds from the green loan will be used to finance its maiden development project and co-living property, lyf one-north Singapore. lyf one-north Singapore is one of ART’s 15 properties that attained green certifications in 2020, bringing the total number of ART’s green properties to 21. 
All four of Mapletree-sponsored REITs have existing green and/or sustainability-linked loans. More recently, in 2021, both <a href="https://www.sgx.com/securities/equities/M44U">Mapletree Logistics Trust</a> (“MLT”) and <a href="https://www.sgx.com/securities/equities/RW0U">Mapletree North Asia Commercial Trust</a> (“MNACT”) have secured new green loan facilities while <a href="https://www.sgx.com/securities/equities/ME8U">Mapletree Industrial Trust</a> (“MIT”) obtained its inaugural S$300 million sustainability-linked loan back in December 2020. <a href="https://www.sgx.com/securities/equities/N2IU">Mapletree Commercial Trust</a> (“MCT”) entered into a green loan facility in June 2020 to refinance loans relating to MCT’s properties which have been certified BCA Green Mark Gold or better. This follows MCT’s first S$670 million green loan in 2019 to part finance its acquisition of Mapletree Business City (Phase 2). List of Singapore REITs and Property Trusts with new Green and/or Sustainability-linked loans since Jan 2020

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			Code
			</td>
			<td>
			Loan Types
			</td>
			<td>
			Aggregated Loan Amount
			</td>
			<td>
			Mkt Cap S$M
			</td>
			<td>
			Dividend Yield (%)
			</td>
		</tr>
<tr>
<td>
			Ascott Residence Trust
			</td>
			<td>
			HMN
			</td>
			<td>
			Green Loan
			</td>
			<td>
			S$50m
			</td>
			<td>
			3,363
			</td>
			<td>
			2.8%
			</td>
		</tr>
<tr>
<td>
			CapitaLand Integrated Commercial Trust
			</td>
			<td>
			C38U
			</td>
			<td>
			Sustainability-linked1
			</td>
			<td>
			S$200m
			</td>
			<td>
			13,853
			</td>
			<td>
			5.4%
			</td>
		</tr>
<tr>
<td>
			Far East Hospitality Trust
			</td>
			<td>
			Q5T
			</td>
			<td>
			Sustainability-linked
			</td>
			<td>
			S$125m
			</td>
			<td>
			1,237
			</td>
			<td>
			5.3%
			</td>
		</tr>
<tr>
<td>
			Frasers Industrial and Commercial Trust
			</td>
			<td>
			BUOU
			</td>
			<td>
			Sustainability-linked2
			</td>
			<td>
			S$100m
			</td>
			<td>
			4,903
			</td>
			<td>
			4.8%
			</td>
		</tr>
<tr>
<td>
			Keppel REIT
			</td>
			<td>
			K71U
			</td>
			<td>
			Green Loan
			</td>
			<td>
			A$300m
			</td>
			<td>
			4,505
			</td>
			<td>
			3.1%
			</td>
		</tr>
<tr>
<td>
			Manulife US REIT
			</td>
			<td>
			BTOU
			</td>
			<td>
			Sustainability-linked &amp; Green Loan
			</td>
			<td>
			US$350m
			</td>
			<td>
			1,553
			</td>
			<td>
			7.6%
			</td>
		</tr>
<tr>
<td>
			Mapletree Commercial Trust
			</td>
			<td>
			N2IU
			</td>
			<td>
			Green Loan
			</td>
			<td>
			Not Available3
			</td>
			<td>
			6,997
			</td>
			<td>
			3.9%
			</td>
		</tr>
<tr>
<td>
			Mapletree Industrial Trust
			</td>
			<td>
			ME8U
			</td>
			<td>
			Sustainability-linked
			</td>
			<td>
			S$300m
			</td>
			<td>
			6,442
			</td>
			<td>
			4.4%
			</td>
		</tr>
<tr>
<td>
			Mapletree Logistics Trust
			</td>
			<td>
			M44U
			</td>
			<td>
			Green Loan
			</td>
			<td>
			S$200m4
			</td>
			<td>
			8,267
			</td>
			<td>
			4.1%
			</td>
		</tr>
<tr>
<td>
			Mapletree North Asia Commercial Trust
			</td>
			<td>
			RW0U
			</td>
			<td>
			Green Loan
			</td>
			<td>
			Not Available3
			</td>
			<td>
			3,503
			</td>
			<td>
			7.0%
			</td>
		</tr>
<tr>
<td>
			Soilbuild Business Space REIT
			</td>
			<td>
			SV3U
			</td>
			<td>
			Green Loan
			</td>
			<td>
			S$80m
			</td>
			<td>
			683
			</td>
			<td>
			7.3%
			</td>
		</tr>
<tr>
<td>
			Suntec REIT
			</td>
			<td>
			T82U
			</td>
			<td>
			Green Loan
			</td>
			<td>
			A$450m
			</td>
			<td>
			4,455
			</td>
			<td>
			4.7%
			</td>
		</tr>
</tbody></table>
 1Loan made under CapitaLand Mall Trust before merger

2Loan made under Frasers Commercial Trust before merger

3Actual loan amount not disclosed

4Two new green loans made during the period, loan amount unavailable for most recent loan in Mar 2021

Source: Company Announcements, Bloomberg (Data as of 30 Mar 2021)
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The rise of sustainable finance saw global sustainable debt issuance surpass US$700 billion in 2020. Investor focus on sustainable debt has expanded in recent years to include instruments such as sustainability-linked and social bonds, as well as green and sustainable-linked loans. While green or sustainability linked loan opens more avenues of funding, it also serves as a signal to investors on the firm’s commitment towards environment and sustainable business practices. 
	 
	
S-REITs and Property Trusts secured new or refinanced green and/or sustainability-linked loans since the start of 2020, totaling more than S$2 billion in loan, of which close to 54% are green loans and rest are sustainability-linked loans.  
	 
	In 2021, Far East Hospitality Trust, Manulife US REIT, Mapletree Logistics Trust, Mapletree North Asia Commercial Trust and Ascott Residence Trust have all secured green or sustainability-linked loans. Proceeds are mostly used to finance general working capital or green certified properties. 

 

In 2020, global sustainable debt issuance surpassed US$700 billion, up from US$566 billion in 2019 (according to Bloomberg). The notion of sustainable debt, which started off with an initial focus on green bonds, has evolved tremendously in the last few years. The scope of sustainable debt has expanded to include instruments such as sustainability-linked and social bonds, as well as green and sustainable-linked loans.



      
    
    Global Sustainable Debt Issuance


To encourage corporates to adopt sustainable business practices, provide them with access to green financing and anchor deep green finance expertise in Singapore, the Monetary Authority of Singapore (“MAS”) introduced a new Green and Sustainability-Linked Loan Grant Scheme (“GSLS”), effective since January 2021. The first of its kind globally, the GSLS supports corporates of all sizes to obtain green and sustainable financing by defraying the expenses of engaging independent sustainability advisory and assessment service providers to validate the green and sustainability credentials of the loan (click here for more information on the GSLS).  
 



Green loans are generally structured in the same way as standard loans except that proceeds from green loans are tracked and used for specific green projects which met certain benchmarked criteria.
	
Sustainability-linked loans generally do not restrict the use of proceeds but borrowers will have to commit to sustainability performance targets, and are awarded a reduction in interest rates if their sustainability targets are met. Therefore, sustainability-linked loans align companies to broad investor sustainability expectations and allow access to a wider range of companies who might not have specific green projects or funding needs. 
	 

While green or sustainability linked loan opens more avenues of funding, it also serves as a signal to investors on the firm’s commitment towards environment and sustainable business practices.  
As many as 12 Singapore REITs and Property Trusts have secured new or refinanced their green and/or sustainability-linked loans since the start of 2020 to 30 March 2021. Together, the 12 S-REITs obtained more than S$2 billion in loan amount, of which close to 54% are in the form of green loans while the other 46% are sustainability-linked loans.  Recent green and sustainability-linked loans by Singapore REITs and Property Trust  
In March 2021, Manulife US REIT (“MUST”) obtained its first sustainability-linked loan of US$250 million from DBS and OCBC. Loan terms incorporate interest rate reductions linked to the achievement of predetermined sustainability performance targets, including efficient use of energy and water, and management of greenhouse gas (GHG) emissions, in relation to MUST’s nine office properties in the U.S. Back in May 2020, MUST also obtained its maiden green loan of US$100 million of which proceeds will be primarily used to refinance Peachtree, a 27-storey Class A office building located in Midtown, Atlanta.  Ascott Residence Trust (“ART”) also secured its maiden green loan in January 2021. The S$50 million five-year green loan from DBS made ART the first hospitality trust in Singapore to secure a green loan. ART noted that proceeds from the green loan will be used to finance its maiden development project and co-living property, lyf one-north Singapore. lyf one-north Singapore is one of ART’s 15 properties that attained green certifications in 2020, bringing the total number of ART’s green properties to 21.  
All four of Mapletree-sponsored REITs have existing green and/or sustainability-linked loans. More recently, in 2021, both Mapletree Logistics Trust (“MLT”) and Mapletree North Asia Commercial Trust (“MNACT”) have secured new green loan facilities while Mapletree Industrial Trust (“MIT”) obtained its inaugural S$300 million sustainability-linked loan back in December 2020. Mapletree Commercial Trust (“MCT”) entered into a green loan facility in June 2020 to refinance loans relating to MCT’s properties which have been certified BCA Green Mark Gold or better. This follows MCT’s first S$670 million green loan in 2019 to part finance its acquisition of Mapletree Business City (Phase 2).  List of Singapore REITs and Property Trusts with new Green and/or Sustainability-linked loans since Jan 2020




			Name
			
			
			Code
			
			
			Loan Types
			
			
			Aggregated Loan Amount
			
			
			Mkt Cap S$M
			
			
			Dividend Yield (%)
			
		


			Ascott Residence Trust
			
			
			HMN
			
			
			Green Loan
			
			
			S$50m
			
			
			3,363
			
			
			2.8%
			
		


			CapitaLand Integrated Commercial Trust
			
			
			C38U
			
			
			Sustainability-linked1
			
			
			S$200m
			
			
			13,853
			
			
			5.4%
			
		


			Far East Hospitality Trust
			
			
			Q5T
			
			
			Sustainability-linked
			
			
			S$125m
			
			
			1,237
			
			
			5.3%
			
		


			Frasers Industrial and Commercial Trust
			
			
			BUOU
			
			
			Sustainability-linked2
			
			
			S$100m
			
			
			4,903
			
			
			4.8%
			
		


			Keppel REIT
			
			
			K71U
			
			
			Green Loan
			
			
			A$300m
			
			
			4,505
			
			
			3.1%
			
		


			Manulife US REIT
			
			
			BTOU
			
			
			Sustainability-linked &amp; Green Loan
			
			
			US$350m
			
			
			1,553
			
			
			7.6%
			
		


			Mapletree Commercial Trust
			
			
			N2IU
			
			
			Green Loan
			
			
			Not Available3
			
			
			6,997
			
			
			3.9%
			
		


			Mapletree Industrial Trust
			
			
			ME8U
			
			
			Sustainability-linked
			
			
			S$300m
			
			
			6,442
			
			
			4.4%
			
		


			Mapletree Logistics Trust
			
			
			M44U
			
			
			Green Loan
			
			
			S$200m4
			
			
			8,267
			
			
			4.1%
			
		


			Mapletree North Asia Commercial Trust
			
			
			RW0U
			
			
			Green Loan
			
			
			Not Available3
			
			
			3,503
			
			
			7.0%
			
		


			Soilbuild Business Space REIT
			
			
			SV3U
			
			
			Green Loan
			
			
			S$80m
			
			
			683
			
			
			7.3%
			
		


			Suntec REIT
			
			
			T82U
			
			
			Green Loan
			
			
			A$450m
			
			
			4,455
			
			
			4.7%
			
		

 1Loan made under CapitaLand Mall Trust before merger

2Loan made under Frasers Commercial Trust before merger

3Actual loan amount not disclosed

4Two new green loans made during the period, loan amount unavailable for most recent loan in Mar 2021

Source: Company Announcements, Bloomberg (Data as of 30 Mar 2021)



Capitaland Integrated Commercial Trust (CICT SP)

Mapletree Pan Asia Commercial Trust (MCT SP)

Mapletree North Asia Commercial Trust (MAGIC SP)

S-REITs secured over S$2 billion of green and sustainability-linked loans since 2020