Daiwa was the joint lead manager for two social samurai bond transactions issued by BPCE in 2018.

Groupe BPCE increased the size of the social tranche in its July 2018 multi-tranche deal to ¥66 billion ($599.87 million) for its 5-year tranche and ¥40 billion for its 10-year tranche.

Vince Purton, head of debt capital markets at Daiwa, said: "It is striking how well the social theme appears to have taken root in Japan."

The social tranche of the transaction received strong demand from Japanese institutional investors, including life insurance companies, banks, asset managers and pension funds.

The proceeds are used for education, healthcare and social purposes.

Purton believes that the social theme does not have a significant impact yet on price in the samurai market. "The starting point for these trades is that adding the social element will attract more and new investors to the issue, and the driving force currently is therefore one of investor diversification rather than price dynamics," he said.

Daiwa said it underwrote its first social issue in 2008 – a 'vaccine bond' in 2008 for the International Finance Facility for Immunisation – and has since helped issued social bonds under numerous other themes, such as education and poverty reduction.

The standardisation of social bonds is an ongoing process and "each bond, in a way, needs its own separate criteria depending on the precise theme applied and the details on the use of proceeds," Purton argues.

Daiwa has led around 50 socially responsible investment (SRI) transactions to date that can clearly be categorised as social according to the Social Bond Principles, Purton adds. Daiwa is a member of the social bond working group of ICMA, which continues its work to codify and standardise social bond definitions and practices.