QIC has successfully converted a subscription finance facility for one of its Infrastructure funds into a US$300 million Sustainability Linked Loan (SLL) – understood to be one of a first of its kind for an Australian manager.
QIC Infrastructure, which aims to primarily invest in the transport, energy/utilities, and social/healthcare sectors, will utilise three key performance indicators (KPIs) for the SLL. With an additional stretch target, it demonstrates QIC’s commitment to setting a robust and ambitious structure.
The KPIs linked to the Sustainability Linked facility’s interest rate margin are:
- Science Based Targets initiative (SBTi) validation for portfolio companies
- Gender diversity
- GRESB rating, and
- Stretch targets demonstrating reduction in greenhouse gas emissions for portfolio companies with SBTi validated targets.
The chosen targets demonstrate QIC Infrastructure’s strong focus on sustainability commitments. Each of the targets have been structured to align with one of QIC Infrastructure’s sustainability focus areas – climate resilience, people and culture and risk and governance.
QIC Head of Global Infrastructure, Ross Israel said converting this loan to a Sustainability Linked Loan aligns with QIC’s thematic investment philosophy.
“We are focused on delivering attractive risk-adjusted returns and demonstrable social and environmental benefits for people and communities. We believe sustainability presents generational investment opportunities, and in our role as an asset manager, we have the distinct privilege of helping to meet society’s needs by responsibly delivering and building resilient infrastructure,” Mr Israel said.
“The significant investment in infrastructure we see coming is being driven by the key megatrends of decarbonisation, digitalisation and deglobalisation.”
MUFG Bank Ltd and ANZ Bank acted as joint sustainability coordinators on the transaction.
A Second Party Opinion was procured from DNV Business Assurance, confirming the loan was issued in alignment with the Sustainability Linked Loan Principles 20231 and demonstrated the ambitiousness of the chosen sustainability performance targets.
Rob Ward, Head of Asian Investment Banking Division, MUFG Bank, Oceania, congratulated QIC on the milestone achievement and for its alignment of financing and sustainability strategies.
"This transaction demonstrates QIC’s commitment to sustainability, as evidenced by the ambitious targets implemented within the financing structure. As joint sustainability coordinator in this process, it also reaffirms MUFG’s well-known capabilities of assisting our key clients to structure sustainable finance solutions across the debt spectrum,” said Mr Ward.
David Simmons, Executive Director Sustainable Finance at ANZ, said ANZ was pleased to support QIC in the integration of the sustainability targets in their financing arrangements, in their role as joint sustainability coordinator.
“This Sustainability Linked Loan has been structured to help set companies, acquired by QIC Infrastructure, on an ambitious pathway to greenhouse gas emissions reductions and improved diversity in the boardroom,” Mr Simmons said.
“In addition, adoption of GRESB Infrastructure ratings will provide important benchmarking to enable targeted improvement initiatives across a broad range of ESG aspects.”
Citations
- Issued by the Asia Pacific Loan Market Association, Loan Markets Association and Loan Syndications & Trading Association
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Further information
QIC is a trusted investment manager and adviser providing risk adjusted returns for the clients we serve. With A$103 billion in funds under management (as at 30 September 2023), we have grown into a leading specialist manager in infrastructure, real estate, private debt, private capital, natural capital and liquid assets for approximately 125 institutional investors internationally. Our presence spans four continents with assets across global markets and offices in Brisbane, Sydney, Melbourne, London, San Francisco, New York and Singapore. Our government ownership, global reach, deep sector expertise and market insights equip us to seize opportunities and navigate uncertainty, striving to deliver resilient investment returns.
QIC is a long-term infrastructure investor with an established international platform, an active management approach and a proven, 17-year track record. With an international team of 87 professionals across five offices, QIC Infrastructure manages A$32.0bn (US$20.9bn) across 22 international direct investments and has realised in excess of A$15.2bn back to its clients. Its sector-centric and thematicbased investment strategy deconstructs risk across sector value chains identifying relative value for investment across market cycles. This drives a targeted origination approach, enabling the firm to build diversified portfolios for its clients. (As at 30 September 2023)
ANZ Institutional provides an extensive network of banking specialists and experts spanning close to 30 markets around the world, including an on-the-ground presence in more than 10 markets across Asia. ANZ Institutional supports local and global businesses looking to capitalise on the movement of money and goods across Asia Pacific and beyond. Building on a proud banking heritage spanning over 180 years, ANZ is one of Australia’s largest listed companies and an international bank with a unique footprint.
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with approximately 2,100 locations in more than 50 markets. The Group has about 160,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing.
The Group aims to “be the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.
MUFG Bank, Ltd. is Japan’s premier bank, with a global network spanning more than 50 markets. Outside of Japan, the bank offers an extensive scope of commercial and investment banking products and services to businesses, governments and individuals worldwide.
In Asia, MUFG has a presence across 20 markets – Australia, Bangladesh, Cambodia, China, Hong Kong, Indonesia, India, South Korea, Laos, Malaysia, Mongolia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.
It has also formed strategic partnerships with some of the most prominent banks in Southeast Asia, further augmenting its unrivalled network across the region – VietinBank in Vietnam, Krungsri in Thailand, Security Bank in the Philippines and Bank Danamon in Indonesia.
For more information, visit https://www.mufg.jp/english
QIC Limited ACN 130 539 123 (“QIC”) is a wholesale funds manager and its products and services are not directly available to, and this document may not be provided to any, retail clients. QIC is a company government owned corporation constituted under the Queensland Investment Corporation Act 1991 (QLD). QIC is also regulated by State Government legislation pertaining to government owned corporations in addition to the Corporations Act 2001 (Cth) (“Corporations Act”). QIC does not hold an Australian financial services (“AFS”) licence and certain provisions (including the financial product disclosure provisions) of the Corporations Act do not apply to QIC. Other wholly owned subsidiaries of QIC do hold AFS licences and are required to comply with relevant provisions of the Corporations Act. QIC also has wholly owned subsidiaries authorised, registered or licensed by the United Kingdom Financial Conduct Authority (“FCA”), the United States Securities and Exchange Commission (“SEC”) and the Korean Financial Services Commission. For more information about QIC, our approach, clients and regulatory framework, please refer to our website www.qic.com or contact us directly.
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