Hong Kong-listed real estate investment manager ESR Group has closed a sustainability-linked loan (SLL) amounting to HK$4 billion (US$509.6 million), with an option to upsize the facility to HK$7 billion.
The deal marks the group’s fifth SLL in the past 12 months, which it says reinforces its leadership in sustainable financing and operations. To date, it has closed a total of US$3 billion in SLLs as it continues to integrate environmental, social and governance (ESG) principles into its financial management, operations and planning.
HSBC (Singapore Branch), Mizuho Bank and MUFG Bank acted as sustainability advisers, mandated lead arrangers and bookrunners.
The five-year unsecured facility, at 1.8% above the Hong Kong interbank rate, has a tiered incentive mechanism where ESR will be entitled to an interest reduction when its sustainability targets are achieved. The proceeds will be used to fund the group’s refinancing of existing borrowings, investments, working capital and general corporate purposes.
ESR has retained its MSCI ESG Rating of “A” in recognition of its outstanding performance in ESG best practices, while Sustainalytics has placed the group in the “low risk” category of experiencing material financial impacts from ESG factors.