CapitaLand Ascott Trust launches IFC’s first sustainability-linked bond in hospitality sector

CAPITALAND Ascott Trust (Clas) has partnered with the International Finance Corporation (IFC) to launch the corporation’s first sustainability-linked bond in the hospitality sector globally, its managers said in a bourse filing on Monday (Oct 31).

IFC, the World Bank Group’s private-sector investment arm, is the sole subscriber for the 16.5 billion yen (S$157.4 million) bond.

The bond is being issued as part of Clas’ S$2 billion multicurrency debt issuance programme with a fixed coupon rate of 1.05 per cent per annum and is paid semi-annually in arrears. The seven-year bond will mature on Nov 7, 2029.

OCBC Bank has been appointed the sole dealer in respect of this issue of notes.

Proceeds from the bond will be used to refinance Clas’ existing borrowings and to further decarbonise three of its serviced residences in South-east Asia: Ascott Jakarta in Indonesia, as well as Ascott Makati and Somerset Millennium Makati in the Philippines, its managers said.

The three serviced residences are expected to achieve a 40.5 per cent reduction in electricity consumption by Dec 31, 2028, which are part of the sustainability performance targets Clas needs to satisfy.

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The projects must also obtain IFC’s Excellence in Design for Greater Efficiencies certification within the same timeframe.

The electricity consumption reduction target is aligned with the targets set out under the CapitaLand 2030 Sustainability Master Plan, Clas’ managers said.

“The master plan outlines the group’s efforts to accelerate its transition to a low-carbon business, improve water conservation and resilience, and to enable a circular economy,” they added.

Serena Teo, chief executive officer of Clas’ managers, noted that 35 per cent of Clas’ portfolio is currently green-certified, and that the stapled group “remains on track” to green 50 per cent of its portfolio by 2025 and its entire portfolio by 2030.

“To date, Clas has raised about S$450 million through sustainable financing. Clas continues to collaborate with like-minded stakeholders in the financing and investment community to fight climate change through our collective efforts.”

In April 2022, Clas issued its first sustainability-linked bond of S$200 million under its newly established Sustainability-Linked Finance Framework.

Stapled securities of Clas closed at S$0.955 on Monday, up S$0.015 or 1.6 per cent before the announcement.