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Frasers Property secures novel A$500m green loan for two Singapore properties

FRASERS Property Limited has secured a A$750 million (S$715.2 million) term loan, comprising a A$500 million green loan tranche and a A$250 million five-year tranche, the real estate developer said on Wednesday morning. The A$500 million tranche is Singapore’s first green loan with a pricing structure linked to the BCA Green Mark, said the company.

The BCA Green Mark is a rating system to evaluate a building for its environmental impact and performance. 

The proceeds from the five-year green loan tranche will be used to refinance existing loans in relation to two properties – Alexandra Point and 51 Cuppage Road. To incentivise sustainable practices, the green loan has a reducing pricing structure with interest cost savings from the second year onwards if the properties maintain the requisite green standards.

The separate A$250 million five-year tranche will be used for general corporate and working capital.

Alexandra Point is a 24-storey office building with a BCA Green Mark Platinum rating, while 51 Cuppage Road is a 10-storey office building with a BCA Green Mark Gold rating. Both buildings are fitted with efficient lighting, water and air-conditioning systems.

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The green loan was issued under Frasers Property’s green loan framework, which contains guidelines on how the group will evaluate and select eligible green projects based on its sustainability objectives, as well as manage the net proceeds from green loans, including reporting on the manner in which the net proceeds are allocated.

The joint lead arrangers, underwriters and bookrunners for the deal were Australia and New Zealand Banking Group, Barclays Bank PLC, First Abu Dhabi Bank PJSC (Singapore), Mizuho Bank, OCBC and Scotiabank. Barclays also acted as green coordinator.

It is the group's fifth green loan, with its previous four loans all coming within the past year.

Frasers Logistics and Industrial Trust undertook a A$170 million green loan in June 2019, while in March 2019, Frasers Property Australia secured a A$600 million green loan and Frasers Property snagged a S$785 million green club loan.

The group's earliest green loan was a S$1.2 billion syndicated green loan taken by Frasers Property in September 2018.

Loo Choo Leong, group chief financial officer, said: "Frasers Property has been a key participant in the green loan market in Asia Pacific and continues to break new ground in this space.

"Green financing is an integral part of our capital management strategy as it not only aligns our capital structure with our business’ focus on sustainability, it helps diversify our funding sources as well."

Frasers Property shares closed up S$0.02 or 1.1 per cent at S$1.85 on Tuesday.

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