CapitaLand Ascott Trust bags S$165 million OCBC sustainability-linked loan

CAPITALAND Ascott Trust (Clas) has secured a S$165 million sustainability-linked multi-currency revolving credit facility from OCBC .

Proceeds from the loan will be utilised by Clas for general corporate purposes.

Dubbed the OCBC 1.5°C Loan, the financing solution was launched in 2023 and grants Clas interest rate reductions upon meeting agreed annual greenhouse gas emission targets validated by the Science Based Targets initiative (SBTi).

Clas is the first lodging trust to secure such a loan from OCBC.

The stapled group is said to have “greened” – or made more environmentally sustainable – 51 per cent of its global portfolio by gross floor area as at May 2024.

This exceeds the target of greening 50 per cent of the portfolio by 2025 and puts Clas on track to achieve 100 per cent by 2030, noted the stapled group and OCBC in a joint statement on Tuesday (Aug 6).

Serena Teo, chief executive of Clas’ managers, said the latest facility from OCBC brings the stapled group’s sustainable financing to over S$700 million to date.

OCBC and Clas also noted an “increasing interest” in the OCBC 1.5°C Loan.

They believe this reflects a “heightened momentum in the global net-zero movement as well as (OCBC’s) active engagement with clients on their decarbonisation ambitions”.

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With total sustainable financing loan commitments at S$63.3 billion, OCBC estimates its sustainable financing loans to have grown 33 per cent from the prior year.

“Despite macroeconomic challenges, it has been very encouraging to see more companies across various sectors in the region chart out their net zero journeys and setting SBTi-aligned decarbonisation targets,” said Elaine Lam, head of global corporate banking at OCBC.

Lam added that the bank has been actively engaging companies that are “not quite as advanced yet” on their transition plans and the viable steps to take towards net zero.

Stapled securities of Clas ended Monday S$0.02 or 2.3 per cent down at S$0.87, while OCBC shares closed S$0.78 or 5.3 per cent lower at S$14.02.