ESR secures US$700m sustainability-linked loan

ESR secures US$700m sustainability-linked loan

ESR Cayman Limited has secured its first sustainability-linked loan (SLL) of US$700 million with an option to upsize it to US$1 billion from a consortium of leading international and Asian banks.

ESR said this marks its first step into sustainable financing, demonstrating its ongoing commitment to environmental, social and governance (ESG).

The senior unsecured, committed US$700 million corporate facility consists of a three-year tranche of US$350 million at Libor plus 2.25% and a five-year tranche of US$350 million at Libor plus 2.75%. It is designed with a tiered incentive mechanism whereas ESR will be entitled to an interest reduction as sustainability targets are achieved.

The proceeds will be used to fund the group’s refinancing of existing borrowings, working capital requirements and for general corporate purposes, said ESR in a statement.

Jeffrey Perlman, Chairman of ESR, said: “ESG sits at the heart of ESR’s business. I am very proud of the continued progress the Group has made over the past 12 months since we launched our ESG 2025 Roadmap. This SLL is another important milestone in our efforts to build a thriving, resilient future for our business, our stakeholders and our local communities. As ESR emerges to become Asia Pacific’s largest real asset manager post the planned acquisition of ARA Asset Management, we are poised to leverage the expertise and best practices across the enlarged platform to drive our ESG thought leadership further.”

Jeffrey Shen and Stuart Gibson, Co-founders and Co-CEOs of ESR, said: “We are delighted to partner with UOB, Crédit Agricole CIB, MUFG and OCBC for our inaugural corporate financing with sustainability-linked features. It is with great pleasure that we can support the development of sustainable capital markets in Asia Pacific real estate, while further strengthening our commitment to ESG. We look forward to exploring more sustainable ways to finance and operate our business in order to create long-term value for our stakeholders.”