FRASERS Property has secured its $600 million in its fourth sustainability linked loan (SLL) to incentivise green practices through a price reduction structure.
Issued under the Sustainable Finance Framework, the five-year SLL comprises $300 million term loan to refinance a maturing loan and a $300 million revolving credit facility for general corporate purposes.
“We are encouraged by the credit market’s recognition of our Australia business’s strong sustainability credentials and the Group’s financial strength,” said Loo Choo Leong, group chief financial officer at Frasers Property.
The corporate syndicated SLL has a price reduction structure with interest cost savings from the second year onwards if Frasers Property Australia (FPA) upholds a minimum four-star Global Real Estate Sustainability Benchmark (GRESB) rating each year.
“One of Frasers Property’s sustainability goals is to finance the majority of our new sustainable asset portfolio with green or sustainable financing by 2024,” added Leong.
The SLL was underwritten by a syndicate of three banks including Barclays Bank, Mizuho Bank and UOB, with Barclays Capital Asia Limited also acting as sustainability coordinator.
This marks FPA’s fourth green or sustainable financing secured since its first green loan in March 2019, which also marked the first corporate syndicated green loan from the LMA/APLMA Green Loan Principles in the country.
“We are pleased with our progress thus far, having secured over S$8 billion of green or sustainable financing across the Group since our (Frasers Property Limited) first green loan in September 2018,” said Leong.
Within Australia, Frasers Property’s operations are certified carbon neutral under the Australian Government’s Climate Active Carbon Neutral Standard. In April 2021 Frasers secured its 15th syndicated sustainability linked loan for $300 million with an accordion option of A$25 million was secured under the LMA/APLMA Sustainability Linked Loan Principles.
With Frasers Property targeting a five-star GRESB rating for all new developments within Australia and a minimum target of a four-star rating across its existing assets in the country.
While Frasers Property Australia has set a net-zero carbon target for all developments and operations by 2028, under the approved Science-Based Targets, with FPA having upheld its GRESB rating since 2018.