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Manulife US REIT secures US$100 million maiden green loan from OCBC Bank

Manulife US REIT secures US$100 million maiden green loan from OCBC Bank

  • 20 May 2020

OCBC Bank acted as the sole lender and green loan advisor for this transaction


Manulife US Real Estate Investment Trust ("Manulife US REIT" or "MUST"), a SGX-ST-listed real estate investment trust ("REIT") managed by Manulife US Real Estate Management Pte. Ltd. (the "Manager"), has secured US$100 million Incremental Green Loan Facility ("green loan") from OCBC Bank, who acted as the sole lender and green loan advisor for this transaction. This is MUST's maiden green loan.

The green loan was raised under Manulife US REIT’s newly established green finance framework (the "Framework"), which was developed together with OCBC Bank. The Framework is prepared in line with the relevant international principles and guidelines (the "Principles")[1], and will guide Manulife US REIT in the management of the proceeds.

The proceeds will be used primarily to refinance Peachtree, a 27-storey Class A office building located in Midtown, Atlanta. The property has received the ENERGY STAR® certification by the U.S. Environmental Protection Agency ("EPA") for six consecutive years since 2014, demonstrating superior energy efficiency performance. The Manager may also use the proceeds for environmental initiatives at other properties within MUST’s portfolio, such as installing energy efficient equipment and water saving facilities, among others.

The Manager aims to remain a sustainability leader in the industry and strives to constantly evaluate and integrate the best Environmental, Social and Governance ("ESG") practices in MUST’s business operations and activities. To this end, MUST was awarded 5 Stars by the Global Real Estate Sustainability Benchmark ("GRESB") for the 2nd year running, ranking 3rd out of 12 listed U.S. office REITs in its peer group. The Manager also proactively adopts green building standards – out of MUST’s nine properties, five are Leadership in Energy and Environmental Design ("LEED™") certified while seven are ENERGY STAR® certified.

Ms Jill Smith, Chief Executive Officer of the Manager said, "In line with the growing importance of ESG to investors, we have incorporated environment and sustainability as an integral part of our operations to ensure our long-term business success. Besides minimising the environmental footprint of our properties, our sustainability strategy complements our proactive capital management approach in terms of diversifying our funding sources with green financing."

Said Ms Elaine Lam, Head, Global Corporate Banking, OCBC Bank, "We are pleased to be the sole lender and green loan advisor for Manulife US REIT's maiden green loan, which will facilitate the delivery of their sustainability strategy. Such partnerships accelerate the movement towards low-carbon economies and green, smart cities worldwide. Real estate companies are continuing to lead the charge and we are delighted to expand our reach to include green buildings in the US."

OCBC Bank has made great strides in progressing its sustainability agenda. The bank was the first in Southeast Asia to announce that it would stop financing new coal-fired power plants, and instead, redirect its focus to financing the development of renewable energy projects. The bank closed out 2019 by topping two sustainable finance league tables - 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. Both league tables are for Asia Pacific (ex-Japan).

[1] Green Bond Principles ("GBP") 2018 by the International Capital Market Association; Green Loan Principles ("GLP") 2020 by the Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications and Trading Association.



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