Ascott Residence Trust (ART) has issued a sustainability-linked bond of $$200 million under its new Sustainability-Linked Finance Framework. It is the first hospitality trust worldwide and the first Singapore-listed real estate trust to issue a sustainability-linked bond.
Per ART’s $2 billion Multicurrency Debt Issuance Programme, proceeds from the five-year bond issuance will be refinancing the trust’s existing borrowings. With a set annual coupon rate of 3.63 percent, paid semi-annually in arrears, the bond will mature in April 2027.
ART’s sustainability-linked bond issuance and commitment to a sustainability performance target of greening 50 percent of its entire portfolio by the end of 2025 have helped the trust achieve a ‘greenium’.
The deal has received strong demand from institutional investors with 2.2 times oversubscription, driving it to grow from S$150 million to S$200 million. The final order book ended at S$335 million.
“Sustainability is core to everything we do at ART. Aligning our financing needs with our sustainability efforts to build a greener portfolio demonstrates ART’s focus on responsible growth,” said Beh Siew Kim, Chief Executive Officer of Ascott Residence Trust Management Limited and Ascott Business Trust Management.
“Our global sustainability strategy centres on improving energy efficiency through technology or engineering solutions and increasing the use of renewable energy. Our efforts are also guided by a Sustainability Committee comprising members from ART’s senior management team and operations and technical department experts.”
Thirty-three percent of ART’s portfolio has been green-certified since 31 December 2021. Together with its operators, the trust aims to green the rest of its portfolio of properties globally by 2030.