Hong Kong-based ESR Group Limited has announced the completion of its HK$4-billion ($509.6 million) sustainability-linked loan, with a possibility to upsize it to HK$7 billion ($891.8 million), according to an announcement on Monday.
The five-year unsecured facility, with a Hong Kong Interbank Offered Rate (HIBOR) at 1.8% plus, has a tiered incentive mechanism where ESR will be entitled to an interest reduction should the firm achieve its sustainability target. The proceeds will be leveraged on the firm’s refinancing of existing borrowings, investments, working capital and general corporate purposes, according to the announcement.
As Asia-Pacific’s largest largest real estate investment manager powdered by the new economy and the third-largest listed real estate investment manager globally, ESR currently has over $140 billion in total assets under management (AUM).
The firm has closed five loans in the past 12 months, completing a total of $3 billion in sustainability-linked loans so far, as it continues to tap into environmental, social and governance (ESG) loans.
The loan completion comes against at a time Hong Kong has emerged as a hub for sustainability loans, which link the interest rate to the companies’ ESG scores or sustainability goals. With mainland firms notching $6.7 billion in green loans last year, almost 40% of the firms were syndicated in Hong Kong, per Bloomberg.