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Keppel REIT establishes green finance framework, issues A$175 mil floating rate green notes due 2027

Jovi Ho
·2-min read

The green financing framework will serve as a reference for the REIT’s green finance transactions.

The manager of Keppel REIT has established a green financing framework, which will serve as a reference for the REIT’s green finance transactions. This includes bonds, term loans, revolving credit facilities, medium-term notes, convertible bonds and perpetual securities, among others.

In a June 26 announcement, Keppel REIT’s manager says DBS Bank was the sole adviser for the framework, which has been externally reviewed by Moody’s Investors Service. Moody’s has assigned a Sustainability Quality Score of SQS2 (Very good) to the framework, stating it “demonstrates a significant contribution to sustainability”.

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The framework was developed in alignment with the four core components of the International Capital Market Association’s (ICMA) Green Bond Principles (GBP) 2021 (including the June 2022 Appendix 1), as well as the Green Loan Principles (GLP) 2023 administered by the Loan Market Association, the Asia Pacific Loan Market Association and the Loan Syndications and Trading Association.

The four components relate to the use of proceeds, the process for project evaluation and selection, the management of proceeds and the reporting process.

Koh Wee Lih, CEO of the manager of Keppel REIT, says the framework will guide investments “towards building a future-oriented and resilient portfolio, while supporting our long-term sustainability goals”.

In January, Keppel launched its sustainability-linked financing framework, developed with DBS Bank and United Overseas Bank U11.

A$175 mil floating rate green notes

Keppel REIT’s “sustainability-focused funding” formed 63% of its total borrowings as at March 31.

In addition, Keppel REIT issued on June 26 A$175 million ($158.44 million) in aggregate principal amount of floating rate green notes due 2027 under its multicurrency debt issuance programme.

According to the manager of Keppel REIT, the net proceeds will be fully used towards funding a part of Keppel REIT’s acquisition of 50% interest in 255 George Street in Sydney, which meets the eligibility criteria as set out in the framework.

In Singapore, all of Keppel REIT’s assets have achieved the Platinum certification under the Building and Construction Authority’s Green Mark scheme. In Australia, the majority of Keppel REIT’s operational buildings have achieved 4.5 stars and above in the National Australian Built Environment Rating System (NABERS) Energy Rating.

T Tower in South Korea and KR Ginza II in Japan have also achieved the Leadership in Energy and Environmental Design (LEED) Building Operations and Maintenance Platinum Award and the Comprehensive Assessment System for Built Environment Efficiency (CASBEE) A rating respectively.

Units in Keppel REIT closed flat at 84 cents on June 26.

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