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Olam signs Asia's first sustainability-linked club loan facility of US$500m
COMMODITIES firm Olam International on Monday said it has secured a three-year sustainability-linked revolving credit facility of US$500 million.
Under the facility, Olam would need to meet improvement targets for a "comprehensive range" of environmental, social and governance (ESG) metrics. These will be assessed by Sustainalytics, an ESG and corporate governance research and ratings firm.
If the annual ESG targets are hit, the interest rate on the facility will be subsequently reduced.
This is Asia's first sustainability-linked club loan, with participation from 15 banks. ING Bank is the sustainability co-ordinator for the facility, and BNP Paribas is the facility agent.
In a media statement, Olam's co-founder and group chief executive officer Sunny Verghese said: "We are proud to be the first company in Asia and the agri-sector to secure a sustainability-linked medium-term club loan that links interest rate on the loan to achieving clear sustainability targets.
"Olam is grateful to the 15 banks that have participated in this innovative facility. We believe that this will serve as a catalyst in further developing sustainability-linked financing in the region. This is a good example of how sustainable companies can become more successful and of how we can 'do good' and 'do well' at the same time."