Ascott Residence Trust issues $200 mil sustainability-linked bond
The bond was released under ART’s $2 billion Multicurrency Debt Issuance Programme under its newly-established Sustainability-Linked Finance Framework. The five-year bond will develop in April 2027 and hold a fixed discount price of 3.63% per annum, paid semi-annually in arrears.
Ascott Residence Trust (ART) has issued a $200 million sustainability-linked bond, making it the initial Singapore-listed property trust as well as the very first hospitality trust around the world to issue such a bond.
Profits from the bond issuance are going to be spent to re-finance ART’s existing loanings. DBS Bank is the single sustainable financing adviser, lead manager as well as bookrunner for the deal.
” Sustainability is origin to every little thing we do at ART. Straightening our funding needs with our sustainability efforts to develop a greener portfolio demonstrates ART’s concentrate on responsible development,” states Beh Siew Kim, CEO of ART. “Since 31 Dec 2021, 33% of ART’s portfolio is green-certified and we aim at to eco-friendly the remainder of our profile by 2030.”
In an April 20 news release, ART says the deal was oversubscribed by 2.2 times on the back of strong demand, leading to the bond concern being upsized from $150 million to $200 million. The last orderbook closed at $335 million with orders from throughout 47 accounts. In regards to investor allocation, 79% of the bond issuance headed to institutional investors, while personal banking capitalists represented 21%.
Last year, ART acquired the very first hospitality trust environment-friendly credit in Singapore, which was utilized to finance its initial advancement job – lyf one-north, a co-living building certified with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
According to ART, the issuance of the sustainability-linked bond has netted the trust a green premium, or “greemium”, which refers to the reduced cost of funding from releasing financial debt that has a positive environmental impact as compared to traditional bonds. ART has even committed to a sustainability performance intended of greening 50% of its complete profile by 2025. To achieve this, the residences have to achieve a regionally, nationally or internationally acknowledged eco-friendly structure standard or certification by a recognised third-party.