Morrison & Foerster advised GLP on its US$658 million sustainability-linked loan (SLL), which is GLP’s first SLL and one of the largest SLLs in the Asia Pacific region. The SLL is tied to GLP’s latest Sustainalytics ESG Risk Rating which reflects GLP’s performance in various environmental, social and governance (ESG) metrics. It features a two-tier incentive mechanism that entitles GLP to an interest rate reduction when targeted improvements in its ESG performance score are achieved. Ten banks participated in this three-year revolving credit facility, with ING acting as the lead sustainability structurer and coordinator for the loan and serving as the sole advisor on GLP’s new green finance framework which will cover the company’s future green use-of-proceeds bond and loan issuances.
GLP is a leading global investment manager and business builder in logistics, real estate, infrastructure, finance, and related technologies. GLP operates across Brazil, China, Europe, India, Japan, the United States and Vietnam, and has over US$100 billion in assets under management. The loan proceeds will be used to contribute to environmental objectives related to climate change mitigation and the promotion of green buildings.
ESG considerations were historically the focus of “impact-first” investors that prioritize social or environmental impact above return on capital. Increasingly, ESG is becoming more mainstream with many companies implementing strategies that support environmentally and socially sustainable economic activity and growth. ESG or SLLs incentivize borrowers to improve and also maintain their sustainability performance.
The MoFo deal team was led out of Singapore by Finance partner Yemi Tépé, of counsel Hong Cheong Wong, and associates Rakesh Grubb-Sharma and Elaine Zhou, with support from San Francisco partner Susan Mac Cormac and London partner Matthew Dunlap.