RMB Arrange FirstRand Bank’s Inaugural Social Bond Issuance

RMB Arrange FirstRand Bank’s Inaugural Social Bond Issuance. Rand Merchant Bank (RMB) Debt Capital Markets and Sustainable Finance acted as sole Lead Manager and Sustainability Coordinator for FirstRand Bank’s (FRB’s) inaugural social bond issuance. The issuance raised R2.585 billion across 3-, 5- and 7-year maturities.

Bhulesh Singh, FirstRand Group Treasurer, said, “It is very encouraging that our inaugural social bond was oversubscribed. This is a positive indicator of investor appetite for high-impact, social instruments in South Africa.”

The proceeds of the social bond, which follows previous green and sustainable bonds by FRB, will be allocated to fund FNB’s lending to micro, small and medium-sized enterprises and affordable housing customers, and RMB’s information and communications technology (ICT) projects which focus on delivering connectivity in previously underserved or disadvantaged areas.

This is the first issuance under FRB’s new sustainable finance framework (framework), the development of which RMB supported in its capacity as sustainability advisor. RMB Sustainable Finance and ESG Advisory team has served FRB as trusted sustainability advisor since the inception of the sustainable finance market in South Africa.

Social bond issuances, by their very nature and intent, need to be guided by local market nuances and specifically need to recognise the socioeconomic imperatives of the country. The process of updating the framework gave the FRB team further opportunity to consider how best to make an impact within South Africa’s local context, while aligning with international principles and best practice.

“In an economy like South Africa where income inequalities persist, social instruments become a crucial enabler in socio-economic growth to ensure the allocation of capital to important social investments This inaugural social bond issuance is an important milestone, that reflects the importance of allocating capital to social assets that deliver positive societal value for underserved societies,” added Nigel Beck, Head of Sustainable Finance and ESG Advisory at RMB.