OUE REIT secures $600m sustainability-linked loan

The REIT will use the loan to repay debt due in 2025.

OUE REIT has obtained a $600m unsecured sustainability-linked loan (SLL) to repay its existing $540m borrowings due in 2025 and for general corporate purposes.

The SLL had an initial loan amount of $540m and a greenshoe option of $600m. It was upsized to $600m following the strong support from 12 banks oversubscribing it by 2.0 times.

The facility marks OUE REIT’s first SLL in relation to its recalibrated sustainability performance targets announced on 29 February. OUE has set a new target of cutting GHG emissions by 40% for its commercial properties, with FY23 as its base year.

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With the new facility, OUE REIT will have no further refinancing requirements until 2H25, when only 25% of the total debt is due.

Post refinancing, the average debt term as of 31 December 2023 will extend to 3.1 years on a pro forma basis, with a stable weighted average cost of debt. Additionally, the proportion of unsecured debt will rise significantly to 86.7% post-refinancing.

OCBC Bank was the sole Mandated Lead Arranger, Bookrunner and the sustainability coordinator for the transaction.