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Newsmakers

Societe Generale to Issue Green Bonds in Taiwan

Becomes first foreign bank granted permission by local financial regulator.

By Michael Katz

Taiwan’s Financial Supervisory Commission has granted French bank Societe Generale approval to issue Taiwanese dollar-denominated green bonds in Taiwan, the first time such permission has been granted for a foreign bank. The proceeds of the issuance will be used to fund renewable energy projects in the country.

The total issue size of the bonds is TWD1.6 billion ($52 million), and they will be divided into three tranches: a five-year TWD900 million bond, a 10-year TWD500 million bond, and a 15-year TWD200 million bond at coupon rates of 0.85%, 1.12% and 1.63%, respectively.

“With this first TWD denominated green bond issued by a foreign bank in Taiwan, Societe Generale demonstrates its continued commitment to contributing to the financing of a more sustainable economy,” Hikaru Ogata, CEO of Societe Generale in Asia Pacific, said in a release.

S&P’s Taiwan Ratings has given Societe Generale’s Taipei Branch a long-term rating of twAA+, which is the second-highest rating it gives, and one which the service says “differs from the highest-rated debt only to a small degree.”

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Ogata said the bank will support the Taiwanese development of a sustainable bond market by leveraging its structuring and distribution expertise, which will allow its clients to access capital markets as an additional funding source to bank lending. One of the projects the bonds will help fund is the Formosa 1 Offshore Wind Project1, Taiwan’s first commercial-scale offshore wind farm.

Taiwan is looking to increase the share of renewables in electricity generation in the country to 20% by 2025, which will include installing 5.5GW of offshore wind capacity.

“This landmark green bond issuance will be supporting the sustainability-related actions from the Taiwanese government to accelerate the use of green energy,” the bank said.

According to Societe Generale, the overall proportion of Asian green bonds has decreased from more than 40% in 2016, to less than 30% in 2017, and just 15% as of May of this year. Nevertheless, it said the region’s potential for green bond issuance to address environmental challenges “remains significant.”

In June, Ng Yao Loong, assistant managing director of Singapore’s monetary authority, told the Green Bonds Asia Conference in Singapore that an estimated $200 billion of investment will be needed between 2016 and 2030.

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Home > News > Corporate Moves > South Korea Pension Fund Names New CIO
Corporate Moves

South Korea Pension Fund Names New CIO

Ahn Hyo-joon, 55, will lead the investment strategy of the world’s third-largest pension fund.

By Michael Katz

Ahn Hyo-joon

South Korea’s National Pension Service (NPS) has named Ahn Hyo-joon as CIO of its $567.83 billion pension fund effective Oct. 8., according to Yonhap News Agency. The pension fund is the third-largest in the world by asset value, according to Willis Tower Watson.

Ahn, 55, replaces Soo-Cheol Lee, who had been the interim CIO since July, after Myoun-Wook Kang abruptly resigned in July of 2017, becoming the fund’s first CIO to leave before the end of his two-year term.

“Chairman Sung-joo Kim concluded that Ahn is the right person to manage NPS assets of over 643 trillion won, considering his expertise, global capability, and understanding of the National Pension Service,” NPS said in a statement.

Ahn was chosen among five short-listed candidates, and his two-year term can be extended for another year, according to Yonhap. Prior to joining the NPS, he was CEO of BNK Financial Group, a holding company based in Busan. Before that he was CEO of BNK Securities and CEO of Kyobo AXA Investment Managers.

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Since its  inception in 1988, the National Pension Fund has recorded an average annual return of 5.5% as of the end of July, with a cumulative investment return of 309 trillion won.

“Challenges we are facing now include the higher impact of our increasingly growing fund on the domestic financial market and the prolonged trend of low interest rate and low growth,” said Ahn in his welcome message on the NPS’ website. “To overcome such challenges, we will continue to make our greatest effort to improve our investment returns down the road by proactively seeking new investment opportunities with more diversified portfolios.”

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