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Frasers Commercial Trust obtains S$100m sustainability-linked loan

THE trustee of Frasers Commercial Trust (FCOT) has taken out a S$100 million sustainability-linked loan to refinance existing borrowings.

The five-year term loan is based on the sustainability-linked loan principles issued by the Loan Market Association and the Asia Pacific Loan Market Association, FCOT’s manager announced on Monday night.

It has a price reduction feature with interest cost savings from the second year onwards, subject to FCOT maintaining a Global Real Estate Sustainability Benchmark (GRESB) rating of not lower than four stars.

In the event that the commercial real estate investment trust’s (Reit) proposed merger with Frasers Logistics & Industrial Trust (FLT) becomes effective, FCOT will become a sub-trust of FLT and the GRESB ratings will be provided by FLT thereafter.

“The interest cost reduction feature of the loan provides an added incentive for us to continuously improve and do more,” said Jack Lam, chief executive officer of FCOT’s manager.

The Reit obtained the term loan from Bank of China Limited, Singapore Branch, which acted as the sustainability-linked loan coordinator.

FCOT participated in the GRESB Real Estate assessment – a global environmental, social and governance performance benchmark for listed and unlisted real estate companies and funds – for the first time in 2019. It was rated four stars out of five, with a score that was above the global average.

Units of FCOT fell S$0.01 or 1.2 per cent to close at S$1.69 on Monday, before the announcement.