Baker McKenzie FenXun and Baker McKenzie Wong & Leow have advised CapitaLand Investment (CLI) on the issuance of its inaugural sustainability-linked panda bond, raising RMB 1 billion. This is the first sustainability-linked bond issued by a Singapore company and also the first panda bond issued by an enterprise in ASEAN after the Regional Comprehensive Economic Partnership (RCEP) agreement came into force.

CLI’s panda bond has enabled the company to access lower-cost RMB capital and further expand its domestic funding channels and investor base, in line with its China-for-China strategy. The panda bond is being issued as part of its RMB 2 billion debt issuance programme, and net proceeds from the issuance will be used to refinance existing borrowings.

The sustainability-linked panda bond is tied to CLI’s target of lowering its energy consumption intensity at its properties in China.  The reduction in energy consumption intensity will contribute to CLI’s efforts in meeting the targets set out in its 2030 Sustainability Master Plan.

Through the Baker McKenzie FenXun joint operation platform that was established between Baker McKenzie and Chinese law firm FenXun, the cross-border team acted as PRC and Singapore law counsel on the transaction. Drawing from the legal expertise of FenXun and Baker McKenzie’s Singapore member firm, Baker McKenzie Wong & Leow, the team was able to provide comprehensive advice on structuring the deal, drafting or reviewing the registration and issue documents, and issuing PRC and Singapore legal opinions (including a special Singapore Qualifying Debt Securities (QDS) Scheme tax opinion), among other legal matters.

The team was led by Shirley Wang (partner, Banking & Finance) and Zhang Hong (head of China Private Equity) of FenXun and Allen Tan (principal, Tax) and Min-tze Lean (principal, M&A) of Baker McKenzie Wong & Leow. Other members of the team include: Samuel He (counsel) of FenXun; and Jeremiah Soh (local principal), Nicholas Kuek (associate) and Natania Ng (associate) of Baker McKenzie Wong & Leow. 

Commenting on the deal, Shirley Wang said, “We are truly honored to be able to play a role in this significant transaction. This deal not only marks a milestone in CLI’s continued pursuit of responsible growth, but its successes could also pave the way for more issuers to follow suit going forward, further fueling the growth of China’s panda bond market.” 

Allen Tan and Min-tze Lean jointly added: “We are very excited to be part of this transaction, which is the maiden issuance of a sustainability-linked panda bond by a Singapore company and also the first panda bond issued by an enterprise in ASEAN after the RCEP agreement came into effect. This transaction plays to our strength in cross-border transactions and also our deep knowledge and experience in assisting companies with their investments on multifaceted aspects. As Singapore companies increasingly look abroad for new market opportunities, we look forward to supporting them every step of the way in their journey with our holistic service offering.”

China International Capital Corporation was the lead underwriter and bookrunner while HSBC Bank (China) was the joint lead underwriter and joint bookrunner for this transaction.
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