Ascott Residence Trust issues $200 mil sustainability-linked bond

Ascott Residence Trust (ART) has issued a $200 million sustainability-linked bond, making it the first Singapore-listed realty trust and the first hospitality trust around the world to issue such a bond.

The bond was issued 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 price of 3.63% per year, paid semi-annually in arrears.

Profits from the bond issuance will be spent to re-finance ART’s existing borrowings. DBS Bank is the sole sustainable finance advisor, lead manager and bookrunner for the purchase.

” Sustainability is origin to whatever we do at ART. Aligning our financing needs with our sustainability initiatives to build a greener profile shows ART’s concentrate on liable growth,” says Beh Siew Kim, CEO of ART. “As of 31 Dec 2021, 33% of ART’s portfolio is green-certified and we focus on to green the remainder of our profile by 2030.”

According to ART, the issuance of the sustainability-linked bond has netted the trust a green premium, or “greemium”, which describes the reduced expense of financing from releasing financial debt that has a favorable environmental influence as compared to typical bonds. ART has also dedicated to a sustainability performance target of greening 50% of its total profile by 2025. To accomplish this, the residential properties have to attain a regionally, nationally or internationally recognised environmental structure requirement or qualification by a recognised third-party.

In an April 20 press release, ART states the bargain was oversubscribed by 2.2 times on the back of strong demand, causing the bond difficulty being upsized from $150 million to $200 million. The final orderbook closed at $335 million with orders from throughout 47 accounts. In terms of investor allowance, 79% of the bond issuance went to institutional financiers, while personal banking investors represented 21%.

In 2021, ART secured the first hospitality trust green financing in Singapore, which was used to finance its initial growth job – lyf one-north, a co-living home licensed with Green Mark GoldPLUS by the Building and Construction Authority of Singapore.

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