More property firms secure green, sustainable finance

Published Tue, Jun 1, 2021 · 06:31 PM

KEPPEL Land, the property arm of BN4  : BN4 0%, has secured its maiden five-year S$150 million sustainability-linked loan from DBS.

The facility references the Singapore Overnight Rate Average (Sora), the first such loan for the group, said Keppel and DBS in a joint statement on Tuesday.

The facility's interest rate comprises a compounded daily Sora rate calculated in arrears, and an applicable margin. The loan also incorporates interest rate reductions linked to pre-determined environmental, social and governance targets, allowing Keppel to enjoy savings in borrowing costs as it achieves these targets.

These include Keppel achieving a five-star rating in the 2021 Global Real Estate Sustainability Benchmark Real Estate Assessment.

The loan proceeds will be used for general corporate purposes, including but not limited to refinancing of maturing debt, capital expenditure for new development projects, and/or potential land and property acquisitions.

Keppel's new sustainability-linked loan follows from its first green loan facility of 850 million yuan (S$176 million), secured in 2019, for the development of Seasons City (Phase 1) in the Sino-Singapore Tianjin Eco-City in China.

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Tan Boon Ping, chief financial officer of Keppel Land, said: "In line with Keppel's Vision 2030, Keppel Land places sustainability at the core of our strategy. This goes beyond the development and management of low-carbon, resource-efficient buildings, but also extends to the strengthening of our green funding sources."

Lim Wee Seng, DBS head of energy, chemicals and infrastructure, said: "By adopting Sora for this landmark facility, Keppel Land will be well-positioned as Singapore shifts toward the mainstream adoption of Sora as the new interest rate benchmark in the cash and derivatives market." Shares of Keppel Corp closed up S$0.05 or 0.9 per cent to S$5.38 on Tuesday.

Separately, Worldwide Hotels Group has inked its first green loan facility worth S$405 million for its new hotel and commercial development, 8 Club Street, with Maybank Singapore. The bank said the loan is one of the largest bilateral green financing for a hospitality asset in Singapore as at June 1, 2021. It is also the Singapore hotel chain's first foray into green financing.

The bilateral loan covered land and construction costs for the 19-storey mixed-use building under construction. When completed in 2022, it will be a four-star hotel with 900 rooms and commercial spaces - comprising restaurants and shops - in the CBD and Chinatown precincts.

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