Impact Finance
IIX Singapore / IIX Founder Durreen Shahnaz.

Singapore-based IIX's $8m bond to help women in Southeast Asia

Burgess COMMENTARY
This is great news ... congratulations to IIX and Durreen Shahnaz and everyone else who helped make this possible. The weak link in all of this is the lack of a suitable metric to measure progress and performance both for the beneficiaries and for the investors. Conventional financial analysis is not good enough. Something more comprehensive is needed that embraces impact in all its complexity. Without such metrics decisions will eventually evolve to being mostly about financial benefit which will negate most of the underlying good goals of the impact initiative. Peter Burgess http://truevaluemetrics.org
Peter Burgess

Singapore-based IIX's $8m bond to help women in Southeast Asia

The Impact Investment Exchange (IIX), a Singapore-based impact enterprise, has closed the world's first social sustainability bond expected to be listed on the Singapore Stock Exchange.

The $8 million Women's Livelihood Bond is the first in a series of IIX social sustainability bonds.

The bond is projected to empower over 385,000 women across Southeast Asia through increased credit access, market linkages, and affordable goods and services, IIX said in a statement yesterday.

The bond is conceptualised and structured by the IIX.

It is supported by a diverse range of stakeholders such as DBS Bank Ltd, ANZ Banking Group, the Rockefeller Foundation, the Clinton Global Initiative, the US Agency for International Development, the Australian Department of Foreign Affairs and Trade, Shearman & Sterling, Hogan Lovells, and the Japan Research Institute.

The bond aims to support a select group of high-impact enterprises and microfinance institutions in Cambodia, Vietnam, and the Philippines.

“The closing of the Women's Livelihood Bond is a landmark achievement for the impact investment market, demonstrating that impact investment products can achieve scale, transparency and liquidity,” said IIX Founder Durreen Shahnaz.

“The infrastructure for social capital markets is now taking off,” she said.

“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 and we can at last aim to have an equitable and truly connected financial market.”

The four-year bond offers a coupon rate of 5.65 percent per annum.

The bond includes a number of credit protection features, including $500,000 of first-loss capital provided by the IIX as well as a 50 percent guarantee of the principal amount of the underlying loan portfolio, provided by the USAID.

The bond received over 60 percent of its investment capital from Asian investors.

Tan Su Shan, group head of consumer banking/wealth management at DBS Bank, added: “We would like to acknowledge the support of our clients, who helped to make the WLB a reality.”

“With Asia's entrenched culture of giving, we see tremendous potential in the business of impact investing in this region.”

“This is a modest but important first step and we will continue to work closely with partners like the IIX to bring innovative financial instruments to investors in Asia who are seeking to combine social and financial returns.”

A recognised leader in impact investing space, the IIX has also established the world's first social stock exchange as well as Asia's largest impact investing equity crowd-funding platform.

The IIX intends to replicate the WLB across the globe and expects that future IIX Social Sustainability Bonds will be listed on IIX's Impact Exchange.