UOL Group has secured a S$540 million five-year sustainability-linked loan pegged to Singapore Overnight Rate Average (SORA), financed by UOB, DBS Bank and OCBC each extending S$180 million, the company said in a filing to SGX Friday.
The loan is eligible for an interest rate reduction if UOL meets sustainability targets for reducing carbon emissions, energy and water intensities for its commercial properties, the filing said.
“As one of Singapore’s leading property developers, we are committed to managing our sustainability strategy in a holistic manner that creates value for our stakeholders. This inaugural SORA-based sustainability-linked loan highlights our commitment to bring about positive environmental and social impact while achieving business objectives,” Kwa Bing Seng, UOL’s chief financial officer, said in the statement.
UOL pointed to its PARKROYAL COLLECTION Pickering Hotel, which has been cited internationally for being eco-friendly and for producing its own energy from its waste, as an example of the group’s efforts on sustainable developments.
Elaine Lam, head of global corporate banking at OCBC Bank, noted buildings in Singapore account for 20 percent of the city-states carbon emissions.
“It is imperative that the real estate industry stays committed to the sustainability movement. UOL, a leader and standard bearer on this front, is walking the talk by setting ambitious targets for this sustainability-linked loan. We look forward to deepening our partnership with them and working together on even more innovative sustainable finance solutions,” she said in the statement.
The loan will be used for general corporate purposes and refinancing an existing loan facility, the filing said.
In 2020, UOL secured its first green loan of S$120 million to partially finance the development of the 347-room Pan Pacific Orchard, slated to open in 2022 as Singapore’s first zero-waste hotel, the filing said.
SORA has become Singapore’s new benchmark interest rate, replacing the Singapore Dollar Swap Offer Rate and Singapore Interbank Offered Rate (SIBOR), the filing said.