CDL secures $740m green loan for property portfolio
Real estate company City Developments Limited (CDL) has confirmed a new green revolving credit facility totalling $470m that will be used to refinance it's the Republic Plaza commercial property and future low-carbon projects.
Through its CDL Properties subsidiary, the organisation has secured the $740m green revolving credit facility (RCF) that will be used for the Republic Plaza property, located in Singapore’s Central Business District.
It follows that $500m green loan raised by CDL in 2019 for new property developments. The company issued its first green bond in 2017, which raised $100m towards a retrofitting the Republic Plaza – including energy efficient lighting, motion sensors and replacement chiller plants.
The five-year RCF will commence in January 2021, and has been approved and provided by lenders including the Agricultural Bank of China, Credit Industriel et Commercial, DBS, HSBC, MUFG, Malayan Banking and SMBC. DBS and HSBC are the Green Loan Advisors for the green RCF.
CDL’s group chief financial officer Yiong Yim Ming said: “With the pandemic heightening awareness on the need to build resilience through responsible investments, green loans have accelerated to become predominant in sustainable financing.
“We embrace Environmental, Social and Corporate Governance (ESG) as a core aspect of our long-term value creation strategy for our business, investors and stakeholders and the successful integration of ESG into our business strategy and operations has led our strong sustainability performance. CDL has paved the way with our inaugural green bond back in 2017 and is forging ahead with another green RCF that reinforces our reputation as a pioneering green developer.”
CDL is the latest company to turn to green RCFs to assist with large-scale sustainability initiatives.
In October, Tesco established a £2.5bn RCF whereby rates and interest are tied to progress against the company’s key environmental targets.
Under the terms of the agreement, facilitated by BNP Paribas and NatWest, Tesco will benefit from a lower interest rate loan margin if it meets its commitments to reduce Scope 1 (direct) and Scope 2 (power-related) emissions; to source renewable electricity through on-site generation and power purchase agreements (PPAs); and to redistribute surplus food.
Additionally, Shell announced in 2019 that it would link the interest and fees paid on its $10bn (£7.5bn) RCF to progress against its carbon targets. Similar financial agreements have been made by the likes of Finnish forestry giant UPM, food and drink ingredient supplier Tate & Lyle and beverage manufacturer Britvic.
Visa launched its inaugural green bond, priced at $500m, four months ago. It will be used to help the company achieve its decarbonisation aims and its alignment with the UN’s Sustainable Development Goals (SDGs).
Global green bond issuance last year reached an all-time high in terms of both individual bonds issued and collective value issued. According to LinkLaters, $185.6bn (£141.7bn) of green bonds were issued in 2019, compared to $142.4 (£108.8) in 2018. Major corporate green bonds launched in 2019 came from the likes of Apple and PepsiCo.
The pandemic seems to have placed a renewed focus on ESG or impact investing – particularly the ‘social’ aspect. JP Morgan recently polled investors from 50 global institutions, representing a total of $12.9 trillion in assets under management on how they expect Covid-19 to impact the future of ESG investing. 71% said it was likely to accelerate action.