Malaysia’s top shipping line MISC has clinched what it says is its first sustainability-linked loan.
The company with more than 100 ships in its fleet, sealed an 11-year, $527m syndicated loan through its subsidiaries in Singapore, for the financing of six very large ethane carriers (VLECs).
The ambitious environmental key performance indicator (KPI) is benchmarked to go beyond the emissions target specified in the International Maritime Organization’s (IMO) 2050 decarbonisation trajectory and the Poseidon Principles, MISC said.
The annual efficiency ratio (AER) will be used to calculate the carbon intensity of MISC’s Gas Assets & Solutions fleet, and MISC should benefit from the annual adjustments of the interest rate benchmarked by meeting the pre-agreed KPIs, the company added.
Raja Azlan Shah Raja Azwa, MISC’s vice president of finance, commented: “Securing this landmark SLL for our VLECs reflect our continued commitment to accelerating the drive to improve our ESG performance by tying our financing with our decarbonisation strategy. We will progressively implement our plan to achieve net-zero GHG emissions by 2050 and this includes fostering strategic collaborations with our stakeholders including the ship financing sector.”
Standard Chartered acted as structuring bank, sustainability coordinator, and hedge coordinator. The Korea Development Bank, Sumitomo Mitsui Banking Corporation, Labuan Branch, DBS Bank, Export-Import Bank of Malaysia Berhad, MUFG Bank Singapore Branch, as well as an undisclosed lender, acted as mandated lead arrangers.
