,Singapore

UOB, ADDX digitise S$50m of Sembcorp’s sustainability-linked bond

They made use of blockchain and smart contact technology to achieve this.

UOB and the digital securities exchange, ADDX, have collaborated for the digitisation of S$50m of Sembcorp Industries’ inaugural S$675m sustainability-linked bond, according to a press release.

UOB was appointed as a joint lead manager of Sembcorp’s ten-and-a-half-year sustainability-linked bond, due in 2032, been priced at a coupon rate of 2.66% per annum. As a Sustainability-linked bond, it involves issuers pledging to improve their performance against tailor-made environmental, social, and governance targets.  

A total of S$50m of the bond allocation was digitised using blockchain and smart contract technology, and which the bank and ADDX custodised and managed.

This was reportedly done to achieve faster processing and lower cost in the custody and administration of the bond, the bank said.

“Digital bonds make use of technologies such as blockchain and smart contracts to eliminate manual processes in the bond’s custody and post-trade administration,” UOB and ADDX said in a joint statement. 

They added that a digital bond can be managed more efficiently as corporate actions such as coupon payments can be carried out with self-executing instructions on a single, distributed ledger. 

Digital bonds are also more efficient, less error-prone and less costly for the issuer, investors and the banks underwriting the deal compared with traditional bonds, UOB and ADDX said.

Through this sustainability-linked bond, Sembcorp has committed to a Sustainability Performance Target (SPT) of reducing its greenhouse gas emissions intensity to 0.40 tonnes of carbon dioxide equivalent per megawatt-hour (tCO2e/MWh) or lower by 31 December 2025. 

If Sembcorp fails to meet the target, the coupon rate will step up by 0.25 percentage points per annum from the first interest payment date on or after 1 April 2026. 

The bond payment obligations of SFS will be unconditionally and irrevocably guaranteed by Sembcorp.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

ARA LOGOS is currently on the 13th spot.
Meanwhile, the demand for petrochemical exports benefitted from this same crisis.
This is expected to speed up the electronic exchange of trade documents.
This is in support of achieving Absolute Zero Carbon by 2040.
Adults will only shop if goods are discounted by at least 48%, survey says.   About 54% of 1,001 Singaporean adults have plans to shop during the Black Friday sales but only if prices of goods are discounted by at least 48%, a survey from Finder.com showed.
This move is in line with its goal to accelerate recommerce growth in SEA.
The notes were released under its $3m Multicurrency Medium Term Note Programme.
Singtel showed the most growth.
Re-exports also saw an increase of 16.4% in the same month.
The marine company apologised to its workers at the dorm.
SG electricity demand peaked at 7,667MW in October 2021.
The two aim to accelerate the progression of AI.
It will focus on sustainable opportunities for companies in Singapore.
Cargo load factor, however, was down by 1.6% YoY to 97.3%.
Despite this, KF pegs their estimated total sales for the year at 13,000 units.