ARA Logos Logistics Trust (ALOG) has entered into its first sustainability-linked interest rate swap (IRS) amounting to S$80 million (US$58.4 million) with HSBC Singapore. The IRS will be used to hedge the interest rate risk of ALOG's borrowings.
The deal is the bank’s first environmental, social and governance (ESG) swap in Singapore. The IRS is directly linked to two specific green targets that are in line with ALOG’s commitment to manage environmental impacts. These are the progressive reduction of carbon emission intensity of the multi-tenanted buildings within the trust’s Singapore portfolio, and the increased usage of renewable energy annually by a pre-determined figure.
Karen Lee, chief executive officer of ARA Logos Logistics Trust Management, says: “With sustainability integrated as part of ALOG’s long-term business strategy, green financing complements our ongoing efforts to proactively manage the environmental impacts of our business. We are committed to strengthen our green funding sources by collaborating with like-minded business partners such as HSBC, who share a collective commitment with us to work towards building a greener future.”