Union Bank of India inks first $1.50b sustainability-linked overseas loan

Union Bank of India (UBI) on Tuesday said it has syndicated a “sustainability-linked loan” facility aggregating $1.50 billion for a Singapore-based global trading corporate.

The syndicated loan is of three years tenor and the coupon rate is LIBOR (London Inter-Bank Offered Rate) plus 155 basis points.

The public sector bank, in a statement, said the facility includes three Key Performance Indicators (KPIs) relating to a reduction in greenhouse gas emissions, responsible sourcing of metals and growing renewable power portfolio.

Key performance indicators

Under this structure, the interest rate paid by the borrower on the credit facilities will decrease or increase based on the group’s progress on the KPIs, it added.

The sustainability-linked KPIs will have to be tested annually and verified by a third-party expert.

UBI said sustainability-linked financing demonstrates its commitment towards environmental and responsible lending, reducing its carbon footprint, and diversifying its asset base towards renewable energy.