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JSE-listed Emira Property Fund has raised R805-million in sustainability-linked debt, with reduced margins for achieving pre-set environmental sustainability targets.
In only the third issue of its kind in South Africa, Emira listed a new unsecured three-year R380-million sustainability-linked bond as part of its domestic medium-term note (DMTN) programme.
The real estate investment trust worked with investors to incorporate sustainability targets into the terms of the note, it says, explaining that, on that basis, the issue received more demand than could be executed.
The oversubscribed issue, arranged by RMB, attracted five investors and added a new investor to the programme.
“Sustainability is becoming a key focus to investors and Emira’s commitment to measurement targets supported the positive result the offer received from the debt capital markets. Investors are further willing to incentivise progress to improving sustainability by an ultimate reduced cost of funding,” says RMB’s Delia Patterson.
Emira has also secured a R225-million four-year facility from Standard Bank and a R200-million four-year facility from RMB.
In seeking to partner with companies that prioritise the natural environment, the banks proposed refinancing Emira’s maturing debt on a basis that incentivises increased environmental sustainability. The agreements set out sustainability targets and timeframes which, when achieved by Emira, will reward it with a lower cost of funding.
Emira CFO Greg Booyens comments that the sustainability-linked funding is “a good fit for Emira” and that the company remains well-positioned for the growing focus on environmental, social and governance-led finance and investment.
“We have a strong environmental ethos and an established record of positive impact. This new form of funding ties our environmental performance to our financial performance, and further integrates sustainability targets in every area of our company. It is good for business and good for the environment,” he says.