Hongkong Land converts HK$1b DBS facility to sustainability-linked loan
Borrower will receive a tiered discount on interest rate if it achieves predetermined ESG targets agreed with lender
Singapore
PROPERTY developer and investment company Hongkong Land has reached an agreement with DBS to convert an existing HK$1 billion (S$175.8 million) five-year revolving credit facility into a sustainability-linked loan.
The interest rate for the loan will be indexed against environmental, social and governance (ESG) targets, both parties said in a joint statement on Friday.
Hongkong Land will receive a tiered discount on the interest rate if it achieves predetermined ESG targets agreed with DBS.
These targets include demonstrating continual improvement in greenhouse gas emissions, electricity consumption, food waste and solar energy generation, while maintaining green building certifications for Hongkong Land's portfolio in Hong Kong's central business district.
Proceeds from the loan will be used for general working capital and corporate funding purposes, as well as to fund ongoing green building initiatives, the parties said.
Tan Su Shan, group head of institutional banking at DBS, said: "As we continue to pursue our own sustainability goals, we are delighted to collaborate with like-minded partners who are accelerating towards more carbon efficient operations, contributing a positive change and generating long-term value for the community."
Since 2018, DBS has provided sustainable financing amounting to about S$13 billion, it said.
DBS shares ended trading on Friday at S$20.76, up S$0.30 or 1.47 per cent amid broad market gains, while shares in mainboard-listed Hongkong Land ended unchanged at US$3.90.
