Ascott Residence Trust issues $200 mil sustainability-linked bond
Ascott Residence Trust (ART) has recently released a $200 million sustainability-linked bond, making it the very first Singapore-listed property trust as well as the very first hospitality trust internationally to issue such a bond.
In 2021, ART acquired the first hospitality trust environment-friendly finance in Singapore, which was utilized to finance its first development task – lyf one-north, a co-living realty licensed with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
In an April 20 news release, ART says the bargain was oversubscribed by 2.2 times on the back of solid need, causing the bond difficulty being upsized from $150 million to $200 million. The last orderbook shut at $335 million with orders from across 47 accounts. In regards to investor appropriation, 79% of the bond issuance headed to institutional capitalists, while exclusive banking capitalists made up 21%.
According to ART, the issuance of the sustainability-linked bond has actually netted the trust a green premium, or “greemium”, which describes the reduced cost of financing from releasing debt that has a positive environmental influence as compared to conventional bonds. ART has even dedicated to a sustainability efficiency aim for of greening 50% of its overall portfolio by 2025. To attain this, the buildings need to acquire a regionally, nationally or internationally identified eco-friendly building benchmark or accreditation by an identified third-party.
Earnings from the bond issuance will definitely be utilized to re-finance ART’s existing loanings. DBS Bank is the single sustainable money consultant, lead supervisor and also bookrunner for the deal.
” Sustainability is foundation to whatever we do at ART. Aligning our funding requires with our sustainability efforts to construct a greener portfolio demonstrates ART’s focus on accountable development,” states Beh Siew Kim, CEO of ART. “Since 31 Dec 2021, 33% of ART’s portfolio is green-certified and we focus on to eco-friendly the remainder of our profile by 2030.”
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 develop in April 2027 and bring a repaired coupon price of 3.63% per annum, paid semi-annually behind.