Ascott Residence Trust issues $200 mil sustainability-linked bond
Ascott Residence Trust (ART) has already released a $200 million sustainability-linked bond, making it the first Singapore-listed property trust and the initial hospitality trust globally to provide such a bond.
According to ART, the issuance of the sustainability-linked bond has netted the trust a green premium, or “greemium”, which describes the reduced price of financing from releasing financial obligation that has a positive natural effect as compared to standard bonds. ART has even dedicated to a sustainability efficiency aim for of greening 50% of its complete profile by 2025. To attain this, the real estates need to achieve a regionally, nationally or internationally recognised environmental building specification or accreditation by an identified third-party.
In an April 20 press release, ART claims the deal was oversubscribed by 2.2 times on the back of strong demand, causing the bond difficulty being upsized from $150 million to $200 million. The final orderbook shut at $335 million with orders from throughout 47 accounts. In terms of financier allocation, 79% of the bond issuance went to institutional financiers, while personal financial financiers made up 21%.
Last year, ART obtained the very first hospitality trust green financing in Singapore, which was used to fund its maiden growth task – lyf one-north, a co-living residence licensed with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
Proceeds from the bond issuance are going to be taken to re-finance ART’s existing borrowings. DBS Bank is the single sustainable finance adviser, lead manager and bookrunner for the transaction.
” Sustainability is core to every little thing we do at ART. Aligning our funding requires with our sustainability initiatives to develop a greener portfolio shows ART’s focus on responsible development,” claims Beh Siew Kim, Chief Executive Officer of ART. “As of 31 Dec 2021, 33% of ART’s profile is green-certified and also we aim at to green the rest of our profile by 2030.”
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 is going to grow in April 2027 and carry a taken care of coupon price of 3.63% per year, paid semi-annually in arrears.