The syndicated loan consists of a 4-year HK$6.8 billion term loan and a HK$700 million revolving credit facility.
HONG KONG - Langham Hospitality Investments (1270.HK) has announced that it has closed a sustainability-linked term loan and revolving credit facility amounting to HK$7.5 billion (US$965 million) with 11 banks.
The syndicated loan consists of a 4-year HK$6.8 billion term loan and a HK$700 million revolving credit facility, Langham announced via a media release.
Demands from banks for Langham Hospitality Investments' new sustainability-linked loan were overwhelming. The syndicated sustainability-linked loan, which is the first raised by a listed company in the Asian hospitality sector, attracted participations by 11 banks in Britain, China, Hong Kong, Japan and Singapore.
Langham Hospitality Group's current sustainability performance is assessed by EarthCheck, the leading provider of environmental, social and governance (ESG) research and benchmarks for the travel and tourism industry globally. EarthCheck's assessments will be used as the benchmark against which performance improvements will be scrutinised.
Langham's CONNECT programme supports the ongoing commitments of the group's CSR pledge. CONNECT identifies four key priorities: Governance, Environment, Community and Colleagues, and they form the framework to address the most relevant corporate responsibility issues to their business.
According to the Business and Sustainable Development Commission, sustainable development in Asia will require US$5 trillion of investments to address complex challenges of climate change, growing inequality and rising urbanisation by 2030. These types of partnerships can aid the finance industry in accelerating the responsible deployment of capital for these innovators in a rapidly growing region.
Previously known as a positive-incentive loan (PIL), the sustainability-linked loan (SLL) is similar to other revolving credit facilities - a type of corporate loan - with the difference being the interest paid by the borrower. This interest is linked to selected sustainability key performance indicators (KPI), which can be, for example, carbon emissions or a more generic ESG target. Companies that achieve their sustainability targets benefit from favourable interest rates, while a failure to do so will lead to higher rates. SLLs
companies therefore have an incentive to align both financing and sustainability
Under the terms of the sustainability-linked loan, Langham Hospitality Investments will be eligible for reductions on interest rates when certain sustainability objectives have been met. The new sustainability-linked loan facility reflects Langham's commitment to create a positive change for the environment, but furthermore, to hold themselves financially accountable for their impact on the environment and society.