Social bond Asia-Pacific region has seen rare growth this year

Moody’s said that the high interest rates in the past three quarters have frustrated the issuance of bonds in the bond market, and there is special room for growth in bonds surrounding transformation policies and regulations. In fact, Japan successfully issued the first green transformation (GX) transformation bond in the first half of this year. In addition to supporting the industry’s carbon reduction Action, the issuance of transitional bonds planned by the government is the biggest incentive to attract investors.

The International Capital Market Association (ICMA), the source of the reference standard for the global sustainable development bond market, revised the “Climate Transition Financing Manual” in June, unified carbon reduction standards, and further confirmed the importance of transition financing, and the net zero carbon emission issue further gained capital Market aid. Moody’s reviewed the updated practices of governments in the Asia-Pacific region, including Singapore’s launch of the Green Finance Industry Working Group in the first half of this year, which proposed additional standards for phasing out coal-fired power plants, which are basically consistent with the ASEAN classification, so that bond issuers and investors can People should not step on mines or be suspected of greenwashing.

Green, Social, Sustainability and Sustainability Sequential Bonds (GSSS), the weaker social bond projects, have achieved rare growth in both the Asia Pacific and Taiwan markets this year.

According to Moody’s statistics, the issuance of social bonds in the Asia-Pacific region in the first half of the year was US$36 billion, an increase of 46% compared with the second half of last year and an increase of 26% compared with the same period last year. Two major distribution markets.

Korea Housing Finance Corporation (KHFC) expands securitization of mortgage loans and mortgage-backed securities to support affordable housing programs for low- and middle-income households in the face of a weakening Korean real estate market, KHFC’s total social bond issuance in six months Nearly US$16 billion, accounting for 44% of the total social bonds in the Asia-Pacific region during the same period. Another is the Japan Expressway Holdings and Debt Service Agency (JEHDP), which also issued a $4.1 billion social bond under the “Affordable Infrastructure Project Finance Program”.

The total amount of social bonds issued in the Taiwan market in the first half of this year was NT$16.2 billion, about three times the amount of last year’s 5.6 billion yuan. The issuers’ industries are concentrated in the financial and telecommunications industries. Take Far EasTone’s social responsibility bonds as an example. , by increasing investment in 5G-related information and communication, the plan can not only bridge the uneven distribution of resources and information caused by the urban-rural gap, but also effectively reduce the urban-rural gap in the basic right to education and medical care. (Photo Credit: Far EasTone)

According to the fact that societies in various countries urgently need resources from all parties to improve the infrastructure of the aging population and declining birth rate, the design of social bonds will be able to transform with net-zero carbon reduction and become the future focus of the GSSS market.

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