Ascott Residence Trust issues $200 mil sustainability-linked bond
Last year, ART obtained the very first hospitality trust green finance in Singapore, which was utilized to finance its first development job – lyf one-north, a co-living building licensed with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
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 is going to mature in April 2027 and also carry a repaired discount price of 3.63% per annum, paid semi-annually in arrears.
Proceeds from the bond issuance will be taken to re-finance ART’s existing loanings. DBS Bank is the sole sustainable finance consultant, lead supervisor and also bookrunner for the transaction.
In an April 20 press release, ART claims the bargain was oversubscribed by 2.2 times on the back of strong need, causing the bond issue being upsized from $150 million to $200 million. The final orderbook closed at $335 million with orders from across 47 accounts. In terms of investor allowance, 79% of the bond issuance headed to institutional financiers, while private financial 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 lower price of funding from issuing debt that has a favorable ecological impact as contrasted to conventional bonds. ART has even committed to a sustainability efficiency intended of greening 50% of its total portfolio by 2025. To achieve this, the homes must obtain a regionally, nationally or internationally identified green structure specification or accreditation by an identified third-party.
Ascott Residence Trust (ART) has recently issued a $200 million sustainability-linked bond, making it the very first Singapore-listed realty trust and also the very first hospitality trust globally to issue such a bond.
” Sustainability is core to whatever we do at ART. Straightening our financing needs with our sustainability efforts to build a greener profile demonstrates ART’s emphasize liable development,” says Beh Siew Kim, Chief Executive Officer of ART. “As of 31 Dec 2021, 33% of ART’s portfolio is green-certified as well as we target to eco-friendly the remainder of our profile by 2030.”