Seafood products maker Thai Union Group has secured its first sustainability-linked syndicated loan amounting to US$400 million in Thailand and Japan. The loan is linked to three key performance indicators (KPIs) around sustainability, with the achievement of the objectives leading to a reduction in interest rates.
The loan is split into a credit facility equivalent to 6.5 billion baht, denominated in both Thai baht and US dollar, and a US$183 million-equivalent “ninja” or “samurai” credit facility denominated in US dollar and Japanese yen. Together, the two facilities are equivalent to 12 billion baht (US$400 million), with a term of five years.
The loan was oversubscribed more than two times. According to the company, its successful closing represents a significant step forward for blue finance – financing related to projects that benefit the oceans – for both Thai Union and the industry as a whole.
The credit facilities are linked to three sustainability KPIs, namely maintaining the company’s consistently high rankings in the S&P Global Dow Jones Sustainability Indices; achieving its greenhouse gas reduction targets; and increasing oversight in its international supply chains through an increase in the use of electronic monitoring and/or human observers aboard its tuna vessels.
Bank of Ayudhya, Mizuho Bank and MUFG Bank are the mandated lead arrangers and bookrunners (MLABs) and sustainability coordinators for the syndicated loan.
Sustainalytics was appointed environmental, social and governance (ESG) provider to give a second-party opinion on the KPIs and alignment to the Sustainability Linked Loan Principles. Each KPI will be verified by external organizations to ensure a fair and independent evaluation.
Thai Union has secured the facility equivalent to 6.5 billion baht with its key onshore relationship banks, including Kasikornbank, Hongkong and Shanghai Banking Corporation and BNP Paribas as lead arrangers, and Oversea-Chinese Banking Corporation (Bangkok Branch) and Sumitomo Mitsui Trust Bank (Thai PCL) as arrangers.
The company has also leveraged the Japanese MLABs’ investor network to enter the Japanese loan market for the first time, raising the equivalent of US$183 million of offshore facility. A further 19 financial institutions in Japan, including branches of foreign banks, have confirmed their participation in the offshore facility alongside the MLABs.