Standard Bank has successfully signed a USD 750 million sustainability-linked syndicated term loan. The facility, co-ordinated by Bank of America, Mizuho and SMBC Bank International is Standard Bank Group’s inaugural sustainability-linked loan.
The margin on the loan is linked to Standard Bank’s performance against three sustainability key performance indicators (“KPIs”). The KPIs align with the Group’s sustainability strategy and relate to committed financing of renewable energy power plants and social projects in South Africa and across the continent, as well as employee diversity. The facility is structured as a two-year loan with an option for Standard Bank to elect to extend for a further year.
Standard Bank is focused, primarily through its sustainable finance division, on providing financial products and services that support positive ESG outcomes, including green and social loans and bonds, sustainability-linked loans and bonds, sustainable trade and working capital solutions and impact investing.
Greg Fyfe, Head of Sustainable Finance at Standard Bank Group said, “Concluding a transaction where key sustainability KPIs are embedded into the funding arrangements really brings the Group’s purpose to life: Africa is our home, we drive her growth. These KPIs will directly impact growth in the markets in which we operate through addressing energy poverty, reducing reliance on fossil fuel based energy, as well as addressing the key social challenges we face across the continent, and ensuring diversity in the workplace.”
Mizuho acted as the sustainability coordinator and facility agent, Bank of America as the documentation agent, and SMBC Bank International as the syndication agent. The facility will be used for general financing purposes and partial refinancing of Standard Bank’s syndicated term loan facility signed in October 2019.
Stewart Wakeman, MD & Head of Origination – Africa at Mizuho commented, “Mizuho is delighted to have been appointed sole sustainability coordinator for Standard Bank’s debut sustainability-linked loan. We are proud to have supported them in undertaking the first sustainability-linked loan issued by a South African Bank addressing both climate change, diversity and inclusion, and containing ESG commitments that certainly represent a ‘best in class’ structure. Supporting clients’ climate transition path and contributing to a sustainable society is a key pillar in both Standard Bank and Mizuho’s business strategies”
Commenting on the facility, Kenny Fihla, Chief Executive for Corporate and Investment Banking at Standard Bank Group said, “The transaction is fully aligned with the Group’s societal, economic and environmental (SEE) impact strategy and will result in positive impact across a number of the identified SEE impact areas – including climate change and sustainable finance. It also supports the Group’s sustainable finance targets as published in our Climate Policy and creates greater focus and drive to achieve the ambitious Group targets of mobilising more than R250 billion in sustainable finance by 2026”.
The deal was well received in the loan market and was over-subscribed. The transaction was upsized to USD 750 million from a launch amount of USD 500 million.
The full bank list comprises:
Co-ordinators, Bookrunners and Mandated Lead Arrangers
Bank of America Europe Designated Activity Company
Mizuho Bank, Ltd.
SMBC Bank International plc
Mandated Lead Arrangers:
Bank of Communications Co., Ltd. Johannesburg Branch
Canara Bank (DIFC Branch)
China Construction Bank Corporation, Johannesburg Branch
Citibank, N.A., South Africa Branch
HSBC Bank plc – Johannesburg Branch
Industrial and Commercial Bank of China (Europe) S.A, Amsterdam Branch
Industrial and Commercial Bank of China Ltd., Luxembourg Branch
The National Bank of Ras Al-Khaimah (P.S.C)
Standard Chartered Bank
State Bank of India, Johannesburg
DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main
Bank of Taiwan South Africa Branch
Taiwan Cooperative Bank, Offshore Banking Branch