GPOR.L Share News (GPOR)

(Sharecast News) - Great Portland Estates has signed a £450m environmental, social and governance (ESG) linked unsecured revolving credit facility at a headline margin of 90 basis points over LIBOR, it announced on Thursday, with a group of five existing relationship banks.

The FTSE 250 London-focussed property company said the facility had an initial five-year term, which could be extended to a maximum of seven years at its request, subject to bank consent.

It said the innovative facility - the first to be issued by a UK real estate investment trust - incorporated three ESG-linked key performance indicators, which aligned with the firm's "ambitious" sustainability strategy, including its participation in the Better Buildings Partnership Climate Change Commitment, which it signed in late 2019.

Those indicators included annual pre-agreed targets, and were based on supporting its target to decarbonise its existing buildings by reducing our portfolio energy intensity by 40% by 2030.

They were also based on supporting its target to build net zero carbon new buildings from 2030 by reducing the embodied carbon of its new-build developments and major refurbishments, and providing "better quality" urban greening measures by increasing the biodiversity net gain across our portfolio.

Great Portland said the targets would further incentivise it to accelerate the decarbonisation of its business, and would support "continued behavioural change" within the group and across its supply chain.

From May 2021, the board said it would measure performance against each key performance indicator annually.

A margin decrease or increase of up to 2.5 basis points would be applied to the headline margin on the basis that this performance, and all margin adjustments would be given by Great Portland Estates to registered charities focused on environmental initiatives.

"We are very pleased to have arranged this innovative new facility with our relationship banks," said director of corporate finance, Martin Leighton.

"Their support for our issuance of the first ESG-linked bank facility by a UK REIT demonstrates their alignment with our sustainability strategy and support for our focused business model, whilst further enhancing our already strong financial position."

The facility was fully available for general corporate purposes, included the company's standard unsecured financial covenants, and was an amendment and extension of its £450m revolving credit facility signed in October 2018, which had a headline margin of 92.5 basis points.

The participating banks included Santander, NatWest, Wells Fargo, Lloyds Bank and Bank of China, with Santander acting as the sustainability coordinator.

"This financing further shows our drive to integrate our sustainability ambitions right across the business and to work with all our stakeholders to create behavioural change as we move closer to decarbonising our business," said director of sustainability and community, Janine Cole.