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.

Normanton Park showflat location

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.

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