Far East Hospitality Trust (Far East H-Trust) has secured its first sustainability-linked loan facility worth SGD125 million.
The facility runs for a term of 5 years, and was secured from OCBC Bank, which is the sole lender for this transaction.
The loan will be used to refinance Far East H-Trust’s existing bank borrowings.
The loan’s interest margin being tied to selected sustainability targets that were set together with OCBC Bank.
These targets include the reduction in the energy consumption of its portfolio and improvements in the BCA Green Mark Certification for Far East H-Trust’s existing properties.
If these pre-set targets are met, the interest margin on the facility will be subsequently reduced on a tiered basis.
Far East H-Trust has a portfolio of 13 properties in Singapore, consisting of 9 hotels and 4 serviced residences.
It was last done on the SGX at SGD0.63, which implies a distribution yield of 3.8% according to data compiled on the Singapore REITs table.