OCBC and RHB co-establish two sustainability-linked solutions
The facility will enable RHB Malaysia to convert its SGD-denominated proceeds to US$.
Singapore's OCBC and Malaysia's RHB Banking Group have joined forces to establish two sustainability-focused solutions.
The first solution is a 2-year S$150m (US$112m) sustainability-linked loan, paired with a cross-currency swap between OCBC Bank and RHB Bank Malaysia.
The second solution is a S$100m (US$75m) sustainability-linked loan to RHB Bank Singapore.
These additions will expand OCBC Bank's already substantial sustainable financing portfolio, which amounted to S$44b (US$33b) by the end of 2022.
The two transactions were designed to encourage and support impactful sustainable business practices, with RHB Banking Group benefiting from improved rates if it achieves the specified Sustainability Performance targets in two critical metrics.
The cross-currency swap will serve as a hedge against currency risks associated with the underlying S$150m (US$112m) sustainability-linked loan with RHB Malaysia. This marks OCBC Bank's initial sustainability-linked derivative ("SLD") transaction with a Malaysian financial institution.
The facility will enable RHB Malaysia to convert its SGD-denominated proceeds to USD at a competitive rate while simultaneously hedging its USD/SGD currency exposure throughout the swap's duration.
(S$1 = US$0.75)