Ascott Residence Trust issues $200 mil sustainability-linked bond
In an April 20 press release, ART claims the offer was oversubscribed by 2.2 times on the back of solid demand, resulting in 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 capitalist allotment, 79% of the bond issuance headed to institutional capitalists, while private banking investors made up 21%.
According to ART, the issuance of the sustainability-linked bond has actually netted the trust a green premium, or “greemium”, which refers to the lower price of funding from releasing debt that has a positive ecological effect as contrasted to traditional bonds. ART has also dedicated to a sustainability efficiency aim for of greening 50% of its total portfolio by 2025. To achieve this, the real estates should achieve a regionally, nationally or internationally identified eco-friendly building benchmark or qualification by a recognised third-party.
Proceeds from the bond issuance will definitely be utilized to re-finance ART’s existing borrowings. DBS Bank is the sole sustainable money adviser, lead manager and bookrunner for the transaction.
Ascott Residence Trust (ART) has already issued a $200 million sustainability-linked bond, making it the very first Singapore-listed property trust and the very first hospitality trust globally to provide such a bond.
The bond was issued 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 also bring a repaired coupon price of 3.63% per year, paid semi-annually behind.
Last year, ART obtained the initial hospitality trust green finance in Singapore, which was utilized to fund its initial growth job – lyf one-north, a co-living realty accredited with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
” Sustainability is origin to whatever we do at ART. Straightening our funding requires with our sustainability initiatives to build a greener portfolio shows ART’s emphasize liable development,” says Beh Siew Kim, Chief Executive Officer of ART. “As of 31 Dec 2021, 33% of ART’s portfolio is green-certified and also we aim at to eco-friendly the rest of our profile by 2030.”