Hong Kong-headquartered Pacific Basin Shipping has successfully closed its US$150 million sustainability-linked three-year senior unsecured committed revolving credit facility for general corporate purposes, representing the global dry bulk shipper’s inaugural sustainability-linked loan (SLL) facility.
BNP Paribas (BNPP) and Citigroup Global Markets Asia (Citi) acted as the joint coordinating mandated lead arrangers and bookrunners and joint sustainability coordinators of the facility. BNPP and Citi have been joined in the facility by Hong Kong and Shanghai Banking Corporation, Iyo Bank, SBI Shinsei Bank and Skandinaviska Enskilda Banken.
The facility aligns funding with Pacific Basin’s corporate sustainability agenda, which features a tiered pricing mechanism, with interest margin adjustments linked to predetermined key performance indicators (KPIs) based on annual sustainability performance targets (SPTs).
The chosen KPIs address carbon intensity and crew safety, which are material environmental and social topics in the industry and environmental, social and governance (ESG) issues that the company prioritizes as most important.
The shipper has engaged Moody’s Investors Service to provide a second-party opinion on the relevance of the KPIs and robustness of the SPTs, and on their alignment with the company’s ESG ambitions, including targeting net zero by 2050 and safeguarding the safety, health and wellbeing of the company’s staff at sea.
“The facility strengthens our financial capacity and diversifies our funding profile while reinforcing our commitment to sustainable shipping,” says Martin Fruergaard, the company’s CEO. “It’s unsecured profile, competitive pricing and oversubscription reflect the market’s support for the company and its ESG initiatives.”