CapitaLand secures first and largest sustainability-linked loan in Asia’s real estate sector
The five-year multi-currency facility is the largest sustainability-linked bilateral loan in Singapore
CapitaLand has secured a SG$300 million (US$217 million) multi-currency sustainability-linked loan from DBS Bank (DBS).
The five-year term loan and revolving credit facility is the first and largest sustainability-linked loan in Asia’s real estate sector. It is also Singapore’s largest sustainability-linked financing provided by a sole lender.
The loan extends beyond the conventional concept of being ‘green’ or attaining a green rating, says CapitaLand in a statement.
The loan is explicitly linked to CapitaLand’s listing on the Dow Jones Sustainability World Index (DJSI World), which tracks the performance of the world’s leading companies in environmental, social and governance (ESG) efforts.
CapitaLand is the highest ranked Singapore company, and one of only two Singapore companies that are listed on the 2018 DJSI World. With this sustainability-linked loan, CapitaLand has the flexibility to use the loan for general corporate purposes, unlike green loans where proceeds are applied towards the funding of specific projects.
For this facility, the ESG performance of CapitaLand is evaluated based on RobecoSAM Corporate Sustainability Assessment, which is conducted annually, DBS notes in a related statement. If the performance targets are met, the interest rate for part of the loan will be reduced, bringing down the company’s cost of debt.
“Sustainable finance has been driven by growing recognition that sustainability practices bode well for the business, as well as the wider environment and society. Fulfilling ESG ambition is also being shifted up the scale of importance among corporates,” says Chew Chong Lim, managing director and global head of real estate at Institutional Banking Group, DBS Bank.
Photo courtesy of CapitaLand. Raffles City Hangzhou, a Leadership in Energy and Environmental Design (LEED) Gold certified integrated development in China
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