SGX-listed Frasers Property Group secures $351m green loan

Frasers Tower. Source: Frasers Property

SGX-listed realty firm Frasers Property has secured the city-state’s first green loan with a pricing structure linked to the BCA Green Mark, the company announced on Tuesday.

The BCA Green Mark is a rating system for evaluating a building based on its environmental impact and performance.

According to a statement, Frasers Property secured an A$750 million ($526.1 million) term loan comprising an A$500 million ($350.8 million) five-year green loan tranche and an A$250 million ($175.4 million) five-year tranche. The transaction was made through Frasers Property Treasury, a wholly-owned subsidiary of Frasers Property.

The statement added that the proceeds of the green loan tranche will be used to refinance existing loans in relation to two green properties in Singapore – Alexandra Point and 51 Cuppage Road. Linked to the BCA Green Mark, the green loan adopts a reducing pricing structure which kicks in from the second year onwards if the green properties maintain requisite green standards. The purpose of this is to incentivise sustainable practices.

Loo Choo Leong, Group Chief Financial Officer of Frasers Property said: “This green loan is yet another step in our green financing journey, which commenced with Southeast Asia’s first syndicated green loan obtained by Frasers Property’s indirect wholly-owned subsidiary in September 2018.”

This is the group’s fifth green loan.

Its previous green loans include an A$170 million ($119.3 million) green loan in June 2019 under Frasers Logistics & Industrial Trust; an A$600 million ($420.9 million) green loan (the first corporate syndicated green loan in Australia) in March 2019 by Frasers Property Australia; a S$785 million ($577.7 million) green club loan in March 2019; and a S$1.2 billion ($880 million) syndicated green loan in September 2018.

Loo added: “Green financing is an integral part of our capital management strategy as it not only aligns our capital structure with our business’ focus on sustainability, it helps diversify our funding sources as well.”

This latest green loan was underwritten by a syndicate of six banks, namely ANZ, Barclays Bank, First Abu Dhabi Bank PJSC (Singapore Branch), Mizuho Bank, OCBC Bank and Scotiabank. Barclays Bank was the green coordinator.

Frasers Property Group is one of the largest real estate multinational companies in Singapore. It had total assets of approximately S$33.2 billion ($24.4 billion) as at March 31, 2019.

It develops, owns and manages a range of portfolio properties across residential, retail, commercial & business parks, logistics & industrial in Southeast Asia, Australia, Europe and China. It also operates hotels and service apartments in more than 70 cities globally.