Ascott Residence Trust issues $200 mil sustainability-linked bond
In an April 20 announcement, ART states the offer was oversubscribed by 2.2 times on the back of solid need, resulting in the bond difficulty being upsized from $150 million to $200 million. The last orderbook shut at $335 million with orders from throughout 47 accounts. In regards to investor appropriation, 79% of the bond issuance went to institutional investors, while private banking financiers represented 21%.
” Sustainability is foundation to whatever we do at ART. Aligning our funding needs with our sustainability efforts to develop a greener portfolio demonstrates ART’s concentrate on liable growth,” says Beh Siew Kim, CEO of ART. “As of 31 Dec 2021, 33% of ART’s portfolio is green-certified as well as we target to green the remainder of our profile by 2030.”
According to ART, the issuance of the sustainability-linked bond has actually netted the trust a green premium, or “greemium”, which refers to the reduced cost of financing from issuing debt that has a favorable environmental effect as compared to conventional bonds. ART has also committed to a sustainability efficiency intended of greening 50% of its complete profile by 2025. To accomplish this, the residential properties have to acquire a regionally, nationally or internationally recognised environment-friendly building requirement or accreditation by an acknowledged third-party.
The bond was issued under ART’s $2 billion Multicurrency Debt Issuance Programme under its newly-established Sustainability-Linked Finance Framework. The five-year bond will grow in April 2027 as well as carry a dealt with discount price of 3.63% per year, paid semi-annually behind.
Proceeds from the bond issuance are going to be used to re-finance ART’s existing loanings. DBS Bank is the single sustainable money adviser, lead supervisor and also bookrunner for the transaction.
Ascott Residence Trust (ART) has provided a $200 million sustainability-linked bond, making it the first Singapore-listed property trust and also the very first hospitality trust worldwide to provide such a bond.
Last year, ART received the initial hospitality trust eco-friendly financing in Singapore, which was made use of to fund its first advancement job – lyf one-north, a co-living building licensed with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.