ESR Cayman announced on Nov 1, it has secured its first Sustainability-Linked Loan (SLL) of US$700 million with an option to upsize it to US$1 billion. This marks ESR’s first step into sustainable financing, demonstrating its ongoing commitment to Environmental, Social and Governance (ESG).
The Group has secured the loan from a consortium of leading international and Asian banks. United Overseas Bank Limited (UOB) acted as the Sole Global Coordinator, Mandated Lead Arranger and Sustainability Advisor. Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB) acted as Sustainability Advisor and Mandated Lead Arranger. Other Mandated Lead Arrangers included MUFG Bank, Ltd (MUFG) and Oversea-Chinese Banking Corporation (OCBC).
See: ESR's new axis of growth
The senior unsecured, committed US$700 million corporate facility consists of a three-year tranche of US$350 million at Libor plus 2.25% and a five-year tranche of US$350 million at Libor plus 2.75%. It is designed with a tiered incentive mechanism whereas ESR will be entitled to an interest reduction as sustainability targets are achieved. The proceeds will be used to fund the Group’s refinancing of existing borrowings, working capital requirements and for general corporate purposes.
ESR notched up another year of outstanding scores and accolades, topping the lists across multiple categories in the 2021 Global Real Estate Sustainability Benchmark (GRESB) Assessment. The Group has also retained its MSCI ESG Rating of A, in recognition of its outstanding performance in ESG best practices.
This inaugural SLL comes on the heels of ESR’s announcement to acquire 100% of the share capital of ARA Asset Management. The ARA Acquisition is set to create the largest real asset manager in Asia Pacific and the third largest listed real estate investment manager globally with a combined AUM of US$131 billion. The enlarged ESR is will comprise of a New Economy real estate platform with over US$50 billion of AUM and a development work-in-progress of over US$10 billion.
