DBS Hong Kong and New World Development Sign 5-year HKD 1 Billion Real Estate Sustainability-linked Loan
Represents another milestone in DBS’ collaboration with a likeminded client on sustainable finance and Asia’s first loan linked to GRESB
New World Development Company Limited (NWD) has signed a 5-year HKD 1 billion loan with DBS Hong Kong (DBS) in equal tranches of HKD 500 million each for a term loan and a revolving loan. This is the first sustainability-linked loan of NWD, the proceeds of which will be used for funding measures driving the long-term sustainability targets and enhancing buildings’ climate resilience, as well as general corporate funding and refinancing purposes.
The company will be eligible for a discount on the interest rate of the loan when it achieves pre-determined sustainability milestones mutually agreed with DBS. The sustainability milestones are based on two benchmarks, the first one includes environmental targets to reduce greenhouse gas emissions, energy and water¹ consumption from NWD’s existing buildings, and waste from NWD’s construction operations in Hong Kong. These form part of the Group-wide “New World Sustainability Vision 2030” (SV2030) targets recently announced in the company’s 2019 Annual Report. The second set includes key performance indicators on NWD’s overall sustainability management as ranked annually by the Global Real Estate Sustainability Benchmark (GRESB), an investor driven organisation that assesses and benchmarks environmental, social and governance (ESG) performance for real asset sector portfolios and assets worldwide. The loan is the first in Asia to link with GRESB performance.
In the 2019 GRESB Real Estate Assessment, NWD has been awarded the highest Five-Star rating and received a score of 90 (against a global average of 72) to become the number one diversified listed company in East Asia. Globally, NWD is ranked 7th among 230 diversified listed businesses. In recognition of the Group’s sustainability efforts, NWD has also been included in the Dow Jones Sustainability Asia Pacific Index for the first time this year.
Adrian Cheng, Executive Vice-Chairman and General Manager of NWD said, “As an industry leader in Asia, NWD is committed to driving innovation and creating shared value for all stakeholders. This sustainability-linked loan confirms our goal to improve environmental, social and governance performance in our businesses. We will continue to explore other possibilities in sustainable financing to drive our company strategy forward and bring positive change to the society.”
Ellie Tang, Head of Sustainability at NWD added, “We are excited to demonstrate the financial value of driving ESG excellence by linking a corporate loan to our internal environmental target achievement and our performance on the third-party sustainability rating provided by GRESB. This is also an opportunity to transparently disclose our ESG strategy and impact to all stakeholders.”
Last year, DBS was a Joint Global Coordinator of a 5-year USD 310 million, 4.75% senior guaranteed unrated green notes offering for New World China Land Limited, a wholly owned subsidiary of NWD. Proceeds of which are used to finance two eligible green building projects in the Greater Bay Area. The transaction marked the company’s first ever green bond issued under New World Group’s Green Finance Framework.
Alex Cheung, Managing Director and Head of Institutional Banking Group of DBS Hong Kong, said, “We are pleased to be part of the real estate value chain by incentivising companies like NWD in advancing their sustainability agenda through our lending practices. We are committed to supporting companies in their sustainable development goals, and together, create a greater positive impact to mitigate environmental challenges.”
[¹] Water reduction target for existing buildings is an internal target at present. NWD will review the Group’s SV2030 targets regularly and make announcement on updates.
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 11 consecutive years from 2009 to 2019.
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About New World Development
Founded in 1970, New World Development Company Limited (“The Group”, Hong Kong stock code: 00017) was publicly listed in Hong Kong in 1972 and is a constituent stock of the Hong Kong Hang Seng Index. A premium brand infused with a unique personality best defined by The Artisanal Movement, New World Group’s core business areas include property development, property investment, roads, aviation and construction. Its operations in Greater China, especially the Greater Bay Area, had a total asset value of approximately HK$503.3 billion as at 30 June 2019. The Group’s two listed companies are NWS Holdings Limited (61%), and New World Department Store China Limited (75%). New World China Land Limited is wholly owned by the Group.