Link REIT secures HK$1 billion sustainability-linked loan from OCBC Bank
Link Asset Management Limited (Link), the manager of Link Real Estate Investment Trust (Link REIT; Hong Kong stock code: 823), and OCBC Bank announced today that The Link Finance Limited (Link Finance), a wholly owned special purpose vehicle of Link REIT, has signed a five-year sustainability-linked loan of HK$1 billion from OCBC Bank. This marks Link REIT’s first sustainability-linked loan transaction in Hong Kong dollar.
To incentivise Link REIT’s sustainability performance, OCBC Bank will offer reductions in the interest rate on a tiered basis subject to Link’s environmental, social and governance (ESG) performance. Link REIT’s ESG performance will be measured by its continued inclusion in leading global sustainability indices as well as improvements in its Global Real Estate Sustainability Benchmark (GRESB) score. GRESB is widely recognised to be the leading sustainability benchmark for real estate and infrastructure investments across the world.
Proceeds of the loan will be used for general working capital and corporate funding purposes.
Kok-Siong Ng, Link’s Chief Financial Officer, said, “Green financing as part of our capital management strategy is an integral part of our vision, and this sustainability-linked loan shows our continued commitment to achieving growth in a sustainable and responsible manner. We are glad to have a like-minded partner like OCBC Bank to support us along this journey.”
Tan Wing Ming, Regional General Manager for North East Asia of OCBC Bank, said, “Link REIT has put sustainability at the core of their business strategy and is an industry leader in that regard. At OCBC, we, too, believe that businesses can do well by doing good, so we are proud to support Link REIT’s green financing endeavours, which will go a long way towards mitigating the impact of climate change."
This sustainability-linked loan also continues OCBC Bank’s momentum in the sustainable finance space. The bank ranked first for Bloomberg’s 2019 Mandated Lead Arranger (MLA) league table for green loans and renewable energy loans, as well as the 2019 MLA league table for green loans and sustainability-linked loans by intelligence service Debtwire.
Link REIT’s maiden sustainability-linked loan signed in March this year was in Australian dollar and for general corporate funding purposes including sustainability initiatives.
Link REIT is a constituent of the Hang Seng Corporate Sustainability Index, the Dow Jones Sustainability Asia Pacific Index and the FTSE4Good Index. Link REIT is also a signatory to the United Nations Global Compact. These bear testament to Link REIT’s strong track record when it comes to sustainability.