Far East H-Trust intends to use the $125 million sustainability loan to refinance existing bank borrowings, with the loan’s interest margin being tied to selected sustainability targets that were set together with OCBC Bank.
Far East Hospitality Trust (Far East H-Trust) has secured its first sustainability-linked loan facility worth $125 million for a term of five years from OCBC Bank, the sole lender for this transaction.
Far East H-Trust intends to use the loan to refinance existing bank borrowings. It noted that the loan’s interest margin is tied to selected sustainability targets, which include reduction in energy consumption of its portfolio as well as improvements in the Building and Construction Authority’s Green Mark Certification of its existing properties.
Should Far East H-Trust meet the pre-set targets, the interest margin on the facility will be reduced on a tiered basis.
Far East H-Trust has 13 properties in Singapore, comprising nine hotels and four serviced residences.
“We recognize our responsibility in conserving the natural environment and have incorporated sustainability and enhancing operational efficiency as essential parts of our operations. This maiden green loan strengthens our approach and commitment in managing our properties,” said Gerald Lee, Chief Executive Officer of the trust’s managers.
OCBC Bank noted that providing the sustainability-linked loan is a natural progression, given that the bank has worked with various real estate investment trusts as well as corporates on their sustainable financing journey.
“We are glad to support Far East Hospitality Trust on this sustainability-linked loan. The continued commitment from like-minded corporates like Far East Hospitality Trust will contribute to the larger goal of building a greener world for future generations,” said Elaine Lam, Head of Global Corporate Banking at OCBC Bank.
“We hope more of their peers will adopt this long-term mindset and take action to shift towards greener sources of financing.”
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: firstname.lastname@example.org