The manager of AIMS APAC REIT (AAREIT) says it has obtained an unsecured sustainability-linked loan (SLL) of up to $400 million and A$150 million ($140 million).
According to a Sept 16 bourse filing, the loan was arranged with the support of United Overseas Bank U11 Limited (UOB) and HSBC as joint lead arrangers and joint sustainability coordinators.
The loan is expected to offer sustainability margin adjustments tied to the REIT’s performance in achieving predetermined sustainability targets.
The manager says these targets are aligned with AAREIT’s environmental, social and governance (ESG) strategy, which aims to reduce Scope 2 carbon emissions, expand solar energy capacity across the portfolio; and increase the proportion of green leases with tenants.
Scope 2 emissions refer to indirect emissions from the company’s operations. This category of emissions are largely calculated from a company’s purchased power, such as electricity, heat, steam or cooling.
Through achieving these targets, AAREIT’s manager says it will benefit from competitive borrowing costs, while driving positive sustainability outcomes across its portfolio and creating long term value for unitholders, tenants and business partners.
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The manager expects to use the proceeds from the SLL to refinance existing debt, as well as for general corporate purposes, working capital requirements and new growth initiatives, including acquisitions, asset enhancement initiatives (AEIs) and developments.
The manager adds that the execution of the SLL will “bolster the REIT’s financial foundation”, with the loan’s average debt maturity extending from 2.1 years to more than 3 years as at June 30.
Post refinancing, the proportion of unsecured debt is set to increase to over 50% of the total debt.
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Russell Ng, CEO of the manager, says: “This facility underscores our commitment to creating a resilient and future-ready portfolio that meets the growing ESG demands of our stakeholders.”
Lim Lay Wah, group head of sector solutions group and global financial institutions at UOB, adds: “UOB is committed to partnering like-minded clients like AA REIT in their ESG endeavours, leveraging our extensive network, innovative solutions and industry expertise to make a positive impact in Asean and beyond.”
Gary Tan, country head of large corporates, HSBC Singapore, says: “The pathway to a low-carbon future requires companies from all sectors to review their operational approach. At HSBC, we remain focused on supporting businesses with their decarbonisation strategies and are pleased to work with AAREIT on their first sustainability-linked loan”.
Shares in AIMS APAC REIT closed 1 cent higher, or up 0.76%, at $1.33 on Sept 16.
