Dubai – Mubasher: Emirates NBD is securing about $1.75 billion in the Gulf region's first sustainability-linked loan to fund existing debt, sources told Bloomberg.
With an existing three-year facility at an all-inclusive cost of 97.5 basis points over Libor, the bank has cut around 25 to 30 basis points in the overall cost of the three-year loan, two sources remarked.
Around 20 banks are participating in the sustainability-linked loan, which is connected to sustainability metrics, including gender diversity in top management roles and water conservation.
These kinds of loans link deal spreads, including the so-called margin ratchets, to borrowers focusing on achieving environmental, social, and governance goals.
Margin ratchets will enable companies to pay less if they achieve certain goals, or more if they do not reach their targets.
