Link signed a $122 million (AUD 212 million) five-year sustainability-linked term loan with DBS Bank (DBS). This marks Link’s first sustainability-linked loan, following its issuance of $500 million green bonds in 2016 and $516 million (HKD 4 billion) convertible green bonds in 2019.
To incentivise sustainable practices, DBS structured the loan to incorporate a reduced pricing structure with interest cost savings. Link will be eligible for the interest savings if it maintains its listing on leading global sustainability indices and achieves sustainability milestones based on performance in the annual independently assessed Global Real Estate Sustainability Benchmark (GRESB).
This loan is also the first by a Real Estate Investment Trust (REIT) in Asia to be linked to GRESB performance. The proceeds of the loan will be used for general corporate funding purposes, including sustainability initiatives. Subsequent to the acquisition of 100 Market Street in Sydney, announced in December 2019, Link is taking on the sustainability-linked loan in Australian dollar to match the currency of this investment.
George Hongchoy, Link’s chief executive officer, said, “As we pursue our medium-term goals outlined in Vision 2025 and to create value for our stakeholders and the communities we serve, we are pleased to ensure the integration of sustainability best practices into our daily operations by introducing our very first sustainability-linked loan with our key relationship bank, DBS.”
“DBS is privileged to partner with Link as it progresses on its sustainability financing journey,” Chew Chong Lim, managing director and global head of real estate, institutional banking at DBS, said. “As Asia’s largest REIT, Link’s maiden sustainability-linked loan underscores the growing shift towards responsible financing in the region. We believe financing solutions with features that incentivise sustainable development enable corporates to generate long-term value while contributing to the United Nations Sustainable Development Goals (SDGs). We look forward to forging more such collaborations as we collectively meet tomorrow’s sustainability challenges.”
Both Link and DBS are signatories to the United Nations Global Compact and are committed to driving progress towards the SDGs in ways that are meaningful for their respective businesses. For DBS, this includes acting on climate change by partnering with corporates in adopting responsible financing practices. In 2019, DBS provided sustainable financing amounting to about $3.4 billion (SGD 5 billion).
Link and DBS are listed on the Dow Jones Sustainability Asia Pacific Index and FTSE4Good Index. Additionally, Link is listed on the Hang Seng Corporate Sustainability Index, while DBS is listed on the Singapore Exchange ESG Indices under the Leaders Index and Transparency Index.
Re-disseminated by The Asian Banker