The nation’s green bond issuance is expected to set a record of NT$56.6 billion (US$1.97 billion) this year, up 12 percent from NT$50.2 billion last year, as companies took advantage of lower interest rates to raise funds, Taipei Exchange (TPEX) data showed.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday issued NT$12 billion of green bonds in three tranches, the first for the world’s largest contract chipmaker, boosting the nation’s cumulative green bond issuance to NT$53.6 billion this year to date, the data showed.
TSMC has said it would use the proceeds to cover its capital expenditure for green buildings and other projects aimed at environmental improvement.
Photo: Hung Yu-fang, Taipei Times
The coupon rates of TSMC’s green bonds hover between 0.4 and 0.48 percent, lower than the rates of 0.5 to 0.67 percent for the corporate bonds it issued earlier this year, TPEX data showed.
TSMC’s green bonds were the third-largest issuance so far this year, following Orsted Wind Power TW Holding A/S’ green bonds valued at NT$15 billion and Taiwan Power Corp’s (Taipower, 台電) green bonds valued at NT$12.8 billion, the data showed.
HSBC Bank Taiwan Ltd (匯豐台灣商銀) yesterday said it would issue NT$3 billion of five-year green bonds with a coupon rate of 0.4 percent on the TPEX on Dec. 25, adding that the bonds would rank first in terms of size among all green bonds issued by financial firms.
The bank’s issuance would raise the nation’s cumulative green bond issuance to NT$56.6 billion, which would be a new record for a single year, the data showed.
HSBC Taiwan, which has been focusing on financing offshore wind projects, would use the proceeds to finance the projects and other green loans, the bank’s head of global markets Ruby Ho (何汝平) told the Taipei Times by telephone yesterday.
Although the bank could also use deposits as financial resources, issuing long-term bonds with fixed rates could help keep the bank’s capital ratio and liquidity ratio at better levels, Ho said.
“Green bond issuance has been hot this year, non only in Taiwan, and the primary reason is lower interest rates,” Ho said, adding that the financial instrument is expected to remain popular next year, as the local regulator has been promoting green financing.
Asked if she expects small and medium-sized enterprises (SMEs) to increasingly issue green bonds, Ho said it would depend whether they have specific green projects, as the proceeds from green bonds can only be spent on eligible projects.
Furthermore, as companies need to have a third-party organization check their green projects, which would be a costly process, SMEs might consider issuing green bonds instead of regular corporate bonds when their demand for funds are high enough, Ho said.
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