ESR upsizes its first Sustainability-Linked Loan to the hard cap of US$1 billion

DigitalCFO Newsroom | 29 November 2021

ESR Cayman Limited (“ESR” or the “Company”, together with its subsidiaries as the “Group”; SEHK Stock Code: 1821) is pleased to announce that the Group has upsized its first Sustainability-Linked Loan (“SLL”) to US$1 billion after its first close in early November 2021.

Taking its inaugural step into sustainable financing, the Group announced that it had secured its first SLL of US$700 million, with an option to upsize it to US$1 billion, on 1 November 2021. On the heels of the initial announcement, the Group has completed the incremental upsize portion of US$300 million in less than one month backed by the addition of new Mandated Lead Arrangers, including Mizuho Bank, LTD (“Mizuho”), Natixis Hong Kong Branch (“Natixis”), The Hongkong and Shanghai Banking Corporation Limited (“HSBC”), and Malayan Banking Berhad (“Maybank”).

The US$300 million incremental facility consists of a three-year tranche of US$150 million at Libor plus 2.25% and a five-year tranche of US$150 million at Libor plus 2.75%. It shares the same financing structure and interest rate with the initial tranche. The SLL includes a tiered mechanism of interest reduction designed to incentivise the Group to achieve sustainability targets. Proceeds raised from the SLL will be used for the Group’s refinancing of existing borrowings, working capital requirements and for general corporate purposes.

Jeffrey Perlman, Chairman of ESR, said: “We are pleased with the upsizing of our inaugural SLL mere weeks after its first closing, giving us further momentum to drive our long-standing commitment to ESG. As ESR emerges to become APAC’s largest real asset manager following the planned acquisition of ARA, the range of stakeholders and local communities we can impact will rapidly grow and expand. As a part of this journey, we are committed to ensuring the Group continues to integrate ESG into every aspect of its business, from corporate financing and sustainable growth to innovative property development and stakeholder engagement.”

Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, added: “We want to express our profound appreciation for the confidence and support we have received from UOB, Credit Agricole, MUFG, OCBC, Mizuho, Natixis, HSBC and Maybank. The upsized SLL demonstrates ESR’s ongoing efforts to create sustainable value for all our stakeholders and the communities we impact by relentlessly pursuing the targets set out in our five-year ESG Roadmap. As ESR is set to embrace its next chapter of growth, we look forward to extending our industry leadership position in ESG as well as sustainable financing and operations.”

ESR has demonstrated its ESG credentials through its proven track record of sustainable properties and operations as well as best corporate practices, all underscored by its ESG 2025 Roadmap. The Group notched up recently another year of outstanding scores and accolades in the 2021 Global Real Estate Sustainability Benchmark (“GRESB”) Assessment, while reaffirming an ESG Rating of A from MSCI for the Group’s continued sustainability excellence.