ESR Cayman, the sponsor of SGX-listed ESR-REIT, has secured a sustainability-linked loan of 28 billion yen ($329.3 million) on Jan 30.
The loan also comes with an option to upsize it to 35 billion yen.
According to the group, the sustainability-linked loan further strengthens ESR’s commitment in environmental, social and governance (ESG) following the recent completion of the acquisition of ARA Asset Management.
The five-year senior unsecured committed corporate facility will see ESR being entitled to a reduction of interest rates once it achieves its sustainability targets, the same tiered incentive mechanism as ESR’s inaugural U$1 billion ($1.36 billion) sustainability-linked loan which closed in November 2021.
The proceeds will be used to fund the group’s refinancing of existing borrowings, working capital requirements and for general corporate purposes.
“ESG sits at the heart of our business, playing a key role in each and every part of our operations. With the closing of this financing, I am very pleased that the group is already realising on its cost-of-capital synergies from the ARA acquisition,” says Jeffrey Perlman, chairman of ESR.
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“As the largest real asset manager in APAC, we have a strong sense of common purpose and a vision to focus on the well-being and long-term priorities of our broader community and environment. We look forward to using the proceeds of this loan to sustainably enhance our assets, operations and the communities in which we work,” he adds.
The sustainability-linked loan was secured from a consortium of Asian banks, which includes Sumitomo Mitsui Banking Corporation (SMBC), Mizuho Bank and E.Sun Commercial Bank. SMBC acted as sustainability advisor and mandated lead manager while Mizuho Bank and E.Sun Commercial Bank were the other mandated lead managers.
“We would like to express our gratitude to SMBC, Mizuho and E.Sun for their recognition of the group’s achievements and continued progress and emphasis on sustainability. We are also delighted to have expanded our relationship with SMBC which became ESR’s strategic investor as a part of the ARA acquisition,” say Jeffrey Shen and Stuart Gibson, co-founders and co-CEOs of ESR.
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“Together with the two sustainability-linked loans ESR and ARA closed previously, these facilities are important milestones as we seek to integrate sustainability in all aspects of our business in pursuit of our goal of creating a positive impact on our stakeholders and the communities where we operate,” add Shen and Gibson.
Photo: ESR
