Hogan Lovells advises the International Finance Corporation on its investment in a JPY16.5 billion sustainability-linked bond issued by CapitaLand Ascott Trust

Singapore, 4 November 2022 – A Hogan Lovells team based in Singapore has advised the International Finance Corporation (IFC) on its partnership with CapitaLand Ascott Trust (CLAS) in connection with CLAS’s issuance of a 16.5 billion yen (S$157.4 million) sustainability-linked bond (Bond). IFC is the sole subscriber for the Bond and this is IFC’s first sustainability-linked bond in the hospitality sector globally.

The Bond is being issued under CLAS’ S$2 billion multicurrency debt issuance programme with a fixed coupon rate of 1.05 per cent per annum and is paid semi-annually in arrears. The seven-year bond will mature in November 2029.

Proceeds from the Bond will be used to refinance CLAS’ existing borrowings and to further decarbonise three of its serviced residences in Southeast Asia, namely Ascott Jakarta in Indonesia, and Ascott Makati and Somerset Millennium Makati both in the Philippines.

The three properties are expected to achieve a 40.5% reduction in electricity consumption by 31 December 2028. They are also expected to obtain IFC’s Excellence in Design for Greater Efficiencies (EDGE) certification within the same timeframe.

“Our investment will support the decarbonisation of a portfolio of energy-intensive buildings, while also ensuring that the energy reduction is specifically aligned with Net Zero targets,” said Kim-See Lim, IFC’s regional director for East Asia and the Pacific.

The Hogan Lovells team was led by Singapore debt capital markets partner Andy Ferris with support from counsel Leon Yap, associate Felicia Chen, and paralegal Audrey Koh.

Commenting on the transaction, Andy said: "We are very grateful to have been able to assist IFC on this important transaction in the sustainable finance space. Sustainability-linked debt instruments are becoming ever more important as an option for borrowers and lenders to combine to finance operations in a manner which encourages and supports the achievement of sustainable outcomes. Our congratulations go to the CLAS and IFC teams on a successful issuance".

For more information on how Hogan Lovells can support green, social and other ESG-linked bond issuance please get in touch with Andy Ferris.

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