CIMB Bank Berhad has entered into a RM270 mil sustainability-linked term loan facility agreement with Malaren International Sdn Bhd, a subsidiary of StarHub Group, a leading Singapore provider of communications, information and entertainment services.
This marks the Bank’s first sustainability-linked loan (SLL) since announcing its SLL offering in Jan 2020, with a commitment of RM3 bil to SLL for corporate borrowers.
The SLL also marks StarHub’s maiden loan linked to sustainability performance targets.
Sustainability is an integral part of both CIMB and StarHub’s strategy and operations.
As an organisation that can influence sustainability best practices among its network, CIMB aims to steer clients towards adopting responsible business practices through mitigating negative impacts while enabling and incentivising positive corporate behaviours.
Providing this SLL is part of sustainability approach, which facilitates corporate borrowers who are keen to enhance their sustainability performance in alignment with one or more of the 17 Sustainable Development Goals (“SDGs”).
CIMB Group chief strategy & design officer, Gurdip Singh Sidhu said, “We are pleased to announce our very first SLL. This facility is very meaningful as it brings two large organisations together in this maiden Malaysia – Singapore cross-border sustainability- linked transaction.
“It is also a testament to CIMB’s commitment in driving the sustainability agenda across ASEAN. Since announcing our SLL offering early this year, we are encouraged by the high levels of interest among clients in Malaysia as well as the region.”
Meanwhile, StarHub chief financial officer, Dennis Chia added: “As we are driving our business to support the growth and development of new services, we are pleased to underpin our commitment in our sustainability strategy by taking up our very first sustainability-linked loan with CIMB.”
“We look forward to more opportunities to participate in sustainability-linked financing to proactively drive a sustainable business and enhance the performance of the company.”
To incentivise environmental transparency and performance, CIMB will grant a rebate against the loan interest based on StarHub’s performance in its annual CDP Climate Change Scores from financial year ending Dec 31, 2021 to financial year ending Dec 31, 2023.
StarHub will be eligible for interest savings each year if it is able to achieve the pre-agreed annual targets on CDP Climate Change Scores. CDP, formerly known as the Carbon Disclosure Project, is a leading global benchmark on the management of climate-related impacts, to assess responders’ progress towards environmental stewardship. – Sept 18, 2020
