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Frasers Property unit secures A$600m green loan in Australia

FRASERS Property on Tuesday announced that its Australia unit has secured a A$600 million (S$576 million) five-year syndicated green loan in Australia to refinance an existing debt facility due in 2020.

The corporate syndicated green loan is derived from green loan principles launched by the Loan Market Association and the Asia Pacific Loan Market Association in March last year. 

According to Frasers Property, the green loan principles set out a clear framework to promote integrity in the development of the green loan market by clarifying the characteristics of a green loan, based around the following four core components: use of proceeds, project selection and evaluation, management of proceeds and reporting.

"To incentivise sustainable practices, the green loan has a reducing pricing structure with interest cost savings from the second year onwards, if Frasers Property Australia's (FPA) five-star Global Real Estate Sustainability Benchmark (GRESB) ratings are maintained," the company said. 

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FPA is evaluated by GRESB in two segments. The developer assessment assesses FPA's development properties, taking indicators from new construction and major renovations into consideration, while the real estate assessment evaluates FPA’s investment properties.

FPA scored the maximum five-star rating in both segments in 2018, above the global average of a three-star rating in developer assessment, and a two-star rating in real estate assessment, Frasers Property said. 

The latest loan is Frasers Property's third green loan. Last week, the group announced a Green Club Loan for its retail mall in Northpoint City South Wing, Singapore. It also secured its first green loan for Frasers Tower, Singapore in September last year. 

Group CEO of Frasers Property Panote Sirivadhanabhakdi said: "Sustainability is an important long-term commitment in Frasers Property’s corporate agenda. In Australia, our resolve to create places where resources are reused, recycled and restored for a more sustainable future has resulted in FPA achieving five-star GRESB ratings.

"The interest cost savings on this green loan from the second year onwards if FPA’s GRESB ratings are maintained incentivises consistency and excellence in this aspect."

The loan was underwritten by a syndicate of four banks, including Barclays Bank plc as underwriter, and Barclays Capital Asia Limited as mandated lead arranger and bookrunner. The other banks are Australia and New Zealand Banking Group, Mizuho Bank and CTBC Bank Co.