Langham Hospitality Investments closed on December 10 a sustainability-linked term loan and revolving credit facility amounting to HK$7.5 billion (US$961.54 million) with 11 banks. The syndicated loan consists of a four-year HK$6.8 billion term loan and a HK$700 million revolving credit facility.
Proceeds of the new loan facility will primarily be used to refinance the existing four-year HK$7.2 billion loan, which matures in May 2020 and carries an interest rate of 0.98% over Hibor per annum. The new sustainability-linked term loan carries a lower interest rate spread than the previous loan.
This is the first sustainability-linked loan in the hospitality sector in Asia, and the largest public sustainability-linked loan by a Hong Kong company. It is also the first sustainability-linked loan to use an EarthCheck performance report.
Under the terms of the sustainability-linked loan, the group will be eligible for a reduction on interest rates when certain sustainability objectives have been met.
The deal attracted a high level of commitment from 11 banks in Britain, China, Hong Kong, Japan and Singapore.
“This is a large, landmark transaction which demonstrates the growing importance of green and sustainability-linked loans in the financing of Hong Kong’s economy,” says Ashish Sharma, head of loan syndications for Asia-Pacific at HSBC, which was the sole sustainability coordinator, joint mandated lead arranger and bookrunner, agent and security agent on the transaction. “As the first sustainability-linked loan in the hospitality sector in Asia, it is also a further evidence that Hong Kong is a leader for sustainable financing in the region.”
Langham Hospitality Investments was established to own and invest in a portfolio of hotels, which currently comprise of The Langham, Hong Kong; Cordis, Hong Kong; and Eaton, Hong Kong.