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Trade and supply chain

Top Asian shipper inks sustainability-linked loan

Executive Director, Structured Asset Finance & Director, Sustainable Finance, ANZ Institutional

2022-05-16 00:00

Asian shipping and logistic company SITC International recently closed a $US72 million three-year sustainability linked loan (SLL) to partially finance the delivery of 37 new build vessels as part of the company’s strategy to lower carbon emissions.

ANZ was sole sustainability coordinator and financier for the bilateral facility which contained three key performance indicators around greenhouse gas (GHG) emissions intensity, nitrogen oxide emissions intensity and sulfur dioxide emissions intensity. The new fleet will be delivered over 36 months.

The KPIs are aligned to the International Maritime Organisation’s (IMO) GHG strategy and complement SITC’s goal of rapidly decarbonising their operations through the development of short, medium, and long-term emission reduction goals.

Importantly, the SLL also received a Second Party Opinion from Hong Kong Quality Assurance Agency confirming alignment to the Asia Pacific Loan Market Association’s Sustainability Linked Loan Principles.

The SLL format permits borrowers to use the loan for general corporate purposes, in this instance to partly finance new vessels. SLLs allow for broader coverage of ESG considerations, relevant and material to the business, and embed an economic outcome against the performance of predefined targets, incentivising incremental improvement in a borrower’s sustainability strategy.

The format has seen significant growth in recent years in part because of the additional flexibility provided to borrowers, in contrast to green loans that require proceeds be used for a specific project.

Listed on the HK Stock Exchange, SITC is one of the largest container shipping companies in China, providing integrated transportation and logistics solutions exclusively within Asia. The company operates 96 vessels and five dry bulk carriers, of which 68 are self-owned. Despite its focus on intra-Asian trade, SITC is ranked 15th amongst global container shipping companies in twenty-foot equivalent unit terms.

Henry Hui is Executive Director, Structured Asset Finance & Jenny Fan is Director, Sustainable Finance at ANZ Institutional

Top Asian shipper inks sustainability-linked loan
Henry Hui & Jenny Fan
Executive Director, Structured Asset Finance & Director, Sustainable Finance, ANZ Institutional


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