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Maiden green loan of US$100m secured by Manulife US REIT

by • May 25, 2020 • Green loanComments (0)174

Manulife US REIT secures US$100 million maiden green loan from OCBC Bank

  • OCBC Bank acted as the sole lender and green loan advisor for this maiden green loan transaction

maiden green loanManulife US Real Estate Investment Trust (“Manulife US REIT” or “MUST”), a SGX-ST-listed real estate investment trust (“REIT”) managed by Manulife US Real Estate Management Pte. Ltd. (the “Manager”), has secured US$100 million Incremental Green Loan Facility (“green loan”) from OCBC Bank, who acted as the sole lender and green loan advisor for this transaction. This is MUST’s maiden green loan.

The maiden green loan was raised under Manulife US REIT’s newly established green finance framework (the “Framework”), which was developed together with OCBC Bank.

The Framework is prepared in line with the relevant international principles and guidelines (the “Principles”) and will guide Manulife US REIT in the management of the proceeds. Green Bond Principles (“GBP”) 2018 by the International Capital Market Association; Green Loan Principles (“GLP”) 2020 by the Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications and Trading Association.

The maiden green loan will be used primarily to refinance Peachtree, a 27-storey Class A office building located in Midtown, Atlanta. The property has received the ENERGY STAR® certification by the U.S. Environmental Protection Agency (“EPA”) for six consecutive years since 2014, demonstrating superior energy efficiency performance. The Manager may also use the proceeds for environmental initiatives at other properties within MUST’s portfolio, such as installing energy efficient equipment and water saving facilities, among others.

The Manager aims to remain a sustainability leader in the industry and strives to constantly evaluate and integrate the best Environmental, Social and Governance (“ESG”) practices in MUST’s business operations and activities. To this end, MUST was awarded 5 Stars by the Global Real Estate Sustainability Benchmark (“GRESB”) for the 2nd year running, ranking 3rd out of 12 listed U.S. office REITs in its peer group. The Manager also proactively adopts green building standards – out of MUST’s nine properties, five are Leadership in Energy and Environmental Design (“LEED™”) certified while seven are ENERGY STAR® certified.

Ms Jill Smith, Chief Executive Officer of the Manager said, “In line with the growing importance of ESG to investors, we have incorporated environment and sustainability as an integral part of our operations to ensure our long-term business success. Besides minimising the environmental footprint of our properties, our sustainability strategy complements our proactive capital management approach in terms of diversifying our funding sources with green financing.”

Said Ms Elaine Lam, Head, Global Corporate Banking, OCBC Bank, “We are pleased to be the sole lender and green loan advisor for Manulife US REIT’s maiden green loan, which will facilitate the delivery of their sustainability strategy. Such partnerships accelerate the movement towards low-carbon economies and green, smart cities worldwide. Real estate companies are continuing to lead the charge and we are delighted to expand our reach to include green buildings in the US.”

OCBC Bank has made great strides in progressing its sustainability agenda. The bank was the first in Southeast Asia to announce that it would stop financing new coal-fired power plants, and instead, redirect its focus to financing the development of renewable energy projects. The bank closed out 2019 by topping two sustainable finance league tables – Bloomberg’s 2019 Mandated Lead Arranger (“MLA”) league table for green loans and renewable energy loans, as well as the 2019 MLA league table for green loans and sustainability-linked loans by intelligence service Debtwire. Both league tables are for Asia Pacific (ex-Japan).

Just a few days ago Guocoland announced that it has secured a $730 million green loan for the development of new residential cum commercial development at Tan Quee Lan Street – the largest green loan of its kind to date.

Guocoland Limited through its indirect subsidiaries, MTG Apartments Pte. Ltd. and MTG Retail Pte. Ltd., has secured a S$730 million green club loan from OCBC Bank, DBS Bank and ICBC Singapore Branch for the construction of a new luxury residential cum commercial development at Tan Quee Lan Street.  The development is a joint venture between GuocoLand and two subsidiaries of Hong Leong Holdings – Intrepid Investments Pte. Ltd. and Hong Realty (Private) Limited.

This is first green loan for GuocoLand and the industry’s largest green loan for a development project in Singapore to  date.
Proceeds from the loan will go towards financing the project, including the efforts in sustainable development, water and energy conservation, and adoption of immersive urban greenery and landscaping. GuocoLand, together with OCBC Bank acting as the Sole Green Financing Advisor, developed a Green Loan Framework which provides guidance for the evaluation of the new residential cum commercial development’s eligibility as a green project based on its sustainability objectives, as well as the management of the loan proceeds.

The Green Loan Framework has been structured in accordance with the Green Loan Principles issued in 2018 by the Loan Market Association and Asia Pacific Loan Market Association. DBS Bank and OCBC Bank are Joint Green Coordinators and, together with ICBC Singapore Branch, are Mandated Lead Arrangers.

GuocoLand has long championed environmental best practices in the built environment. The green loan reinforces GuocoLand’s continued commitment to sustainable development with the Tan Quee Lan Street site expanding its portfolio of environmentally friendly developments in Singapore.

Mr Paul Ho, chief mortgage officer at iCompareLoan, said, “such loans are useful for clients to help them develop sustainable buildings which are future ready. By partnering banks such as OCBC, businesses can create positive outcomes in their sustainability journey.”

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