Ascott Residence Trust issues $200 mil sustainability-linked bond
Earnings from the bond issuance will be utilized to re-finance ART’s existing loanings. DBS Bank is the sole sustainable finance adviser, lead manager and also bookrunner for the purchase.
” Sustainability is origin to everything we do at ART. Aligning our financing needs with our sustainability efforts to construct a greener portfolio shows ART’s focus on responsible development,” states Beh Siew Kim, CEO of ART. “Since 31 Dec 2021, 33% of ART’s profile is green-certified and we target to green the remainder of our portfolio 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 releasing financial debt that has a positive environmental effect as contrasted to standard bonds. ART has also dedicated to a sustainability performance target of greening 50% of its total profile by 2025. To achieve this, the residences need to acquire a regionally, nationally or internationally recognised environment-friendly building specification or certification by a recognised third-party.
Last year, ART acquired the initial hospitality trust eco-friendly loan in Singapore, which was utilized to finance its maiden advancement job – lyf one-north, a co-living building certified with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
In an April 20 press release, ART claims the bargain was oversubscribed by 2.2 times on the back of strong demand, resulting in the bond concern being upsized from $150 million to $200 million. The last orderbook shut at $335 million with orders from across 47 accounts. In regards to financier allocation, 79% of the bond issuance headed to institutional financiers, while personal banking investors represented 21%.
Ascott Residence Trust (ART) has already released a $200 million sustainability-linked bond, making it the first Singapore-listed realty trust and also the very first hospitality trust around the world to release such a bond.
The bond was released under ART’s $2 billion Multicurrency Debt Issuance Programme under its newly-established Sustainability-Linked Finance Framework. The five-year bond will mature in April 2027 and also hold a fixed coupon price of 3.63% per year, paid semi-annually in arrears.