Russell McVeagh has assisted Summerset to complete a loan facility refinance for approximately $1.2 billion, incorporating a $700 million Sustainability Linked Loan (SLL) component, which takes effect 1 October 2021. This is one of the largest SLLs in the market to date, and the second SLL of significance that the firm has advised on so far this year.
Banking and Finance partner John Powell led the Russell McVeagh team advising Summerset, a New Zealand retirement village and aged care service provider, on the refinancing, along with partner Tom Hunt and solicitor Ben Regan.
An SLL commits a borrower to key environmental, social and/or governance (ESG) targets, with the costs of borrowing under the facility adjusted up or down dependant on how the borrower delivers against its sustainability targets. Summerset’s new SLL arrangement incorporates the following targets:
- Construction waste diversion from landfill;
- the roll out of memory care suites and the continuation of dementia friendly accreditation; and
- an emissions reduction target that will align with, and encompass, other initiatives.
“We have appreciated the opportunity to work alongside Summerset and to assist their team achieve this market-leading SLL refinance as part of their commitment to sustainability. It marks another important step in sustainable lending in the New Zealand market and our team is proud to continue to play a role in the growth of this type of lending,” said Powell.
The increased capacity the refinance offers provides headroom to fund Summerset’s growth in Australia, in line with Summerset’s previously signalled plans.
Advising on Summerset’s refinancing follows on from Russell McVeagh’s team having recently assisted ANZ New Zealand who, together with NAB, were joint Sustainability Coordinators for Kathmandu Holdings Limited’s A$300 million debt facility refinancing. That included the establishment of a syndicated A$100 million sustainability linked loan (SLL) facility – which was then the largest syndicated SLL in the New Zealand market.