Impact investment firm launches US$8 million bond on Singapore Stock Exchange

4th August 2017 Jack Aldane

More than quarter of a million women in Cambodia, the Philippines and Vietnam stand to benefit from a US$8 million bond developed by Singapore-based impact enterprise, the Impact Investment Exchange, with the support of DBS Bank.

The Women’s Livelihood Bond is the first aimed at social sustainability to be listed on a stock exchange. Asian investors, particularly DBS customers, hold a 60 percent majority stake in the four-year instrument, which has a coupon rate of 5.65 percent per year.

Durreen Shahnaz, Impact Investment Exchange’s founder, called the closing of the bond “a landmark achievement for the impact investment market”, adding that the pull of investors showed impact investment products can achieve scale.

Shahnaz told Development Finance: “This was indeed a fantastic way to see more Asian investors embracing impact investing space and driving forward SDG 5: ‘Gender Equality’ and SDG 8: ‘ Decent Work and Economic Growth’. This also proves that we need more innovative financial instruments in the markets that will enable more and more investors to put their capital to use for impact investing.”

In an official statement, she said: “The infrastructure for social capital markets is now taking off. This transaction brings us one step closer to a day when our financial markets consider social and environmental impact on an equal footing with financial returns.”

Stakeholders from the public, private and philanthropic sectors include pro bono advisers Shearman & Sterling, US Law firm Hogan Lovells, along with the Rockefeller Foundation, the Clinton Global Initiative, ANZ Banking Group, the Japan Research Institute, and the Australian Department of Foreign Affairs and Trade.

Credit protection features of the bond include US$500,000 of first-loss capital provided by the Impact Investment Exchange. A 50 percent guarantee of the underlying loan portfolio is also provided by US Agency for International Development (USAID), according to DBS Bank.

Tan Su Shan, DBS Group head of consumer banking and wealth management, described the bond as a “modest but important” step towards crowding in private capital from the impact investor community.

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