Ascott Residence Trust issues $200 mil sustainability-linked bond
Last year, ART secured the first hospitality trust environment-friendly funding in Singapore, which was utilized to finance its maiden advancement job – lyf one-north, a co-living house licensed with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.
The bond was provided 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 hold a repaired coupon rate of 3.63% per annum, paid semi-annually behind.
Ascott Residence Trust (ART) has released a $200 million sustainability-linked bond, making it the initial Singapore-listed real estate trust as well as the initial hospitality trust globally to release such a bond.
In an April 20 news release, ART claims the deal was oversubscribed by 2.2 times on the back of solid demand, leading to the bond difficulty being upsized from $150 million to $200 million. The final orderbook closed at $335 million with orders from across 47 accounts. In regards to financier allowance, 79% of the bond issuance went to institutional investors, while private banking investors represented 21%.
Earnings from the bond issuance are going to be used to refinance ART’s existing borrowings. DBS Bank is the single lasting money advisor, lead manager and bookrunner for the purchase.
According to ART, the issuance of the sustainability-linked bond has actually netted the trust a green premium, or “greemium”, which describes the lower expense of financing from releasing financial debt that has a positive natural impact as compared to typical bonds. ART has also dedicated to a sustainability performance intended of greening 50% of its total portfolio by 2025. To accomplish this, the real estates must achieve a regionally, nationally or internationally recognised green structure requirement or qualification by an acknowledged third-party.
” Sustainability is origin to every little thing we do at ART. Straightening our financing requires with our sustainability efforts to construct a greener portfolio shows ART’s concentrate on accountable growth,” says Beh Siew Kim, Chief Executive Officer of ART. “Since 31 Dec 2021, 33% of ART’s profile is green-certified as well as we target to green the rest of our portfolio by 2030.”