Link REIT's US$500 million "Green Bond"
As part of Link's commitment towards sustainable development, we issued our first green bond in July 2016 raising US$500 million at 2.875% fixed rate due 2026. This is one of the lowest rates ever achieved by a Hong Kong corporate. The bond has been rated “A2” and “A” by Moody’s and S&P’s respectively. We realise the continued success of Link is directly correlated with the communities around us flourishing socially, environmentally and economically. Our green bond reinforces our commitment to this belief and enables us to continue creating value through building healthier, environmentally-friendly, low carbon buildings.
We have established a Green Bond Framework which outlines how we select green projects and report on the use of proceeds.
Link Green Bond Framework
Use of Proceeds
The net proceeds of the issuance of Notes will be used to refinance or fund, in whole or in part, existing and future projects that are eligible as per the criteria specified below.
In order for a project to be funded through the green bond proceeds, the project must meet one or more of the following eligibility criteria:
1. Any project for an existing or new building that has received, or expects to receive, certification according to third party verified green building standards
including a) Hong Kong BEAM - Silver, Gold or Platinum; or b) LEED Silver, Gold or Platinum. Building project types can include:
a. Building developments and redevelopments
b. Renovations to existing buildings
c. Tenant improvements
2. Projects which result in achieving, based on third-party assessment, at least a 15% improvement in energy efficiency or, a NABERS Shopping Centres
rating equal to or greater than 3 or similar rating scheme to an equivalent rating level;
3. Projects such as those that reduce waste to landfill, improve water efficiency, promote adoption of low carbon transportation including electric vehicles,
and improve climate change resilience.
Project Evaluation and Selection Process
The eligible green projects are selected by Link REIT’s sustainability team together with the treasury team in accordance with Link REIT’s Sustainability Framework, Green Initiatives and the eligibility criteria outlined above.
Management of Proceeds
As long as the Notes are outstanding, Link REIT’s internal records will show the allocation of the net proceeds of the Notes to existing and future eligible green projects. Pending the allocation of the net proceeds of the Notes to existing and new eligible green projects, the net proceeds will be used to repay amounts of outstanding debt. Link REIT will not hold any unallocated proceeds as cash; this is consistent with the cash management practices for REITS.
Throughout the Green Bond, Link REIT will make and keep readily available through Link REIT’s integrated annual report, and on this page of Link’s corporate sustainability website, up to date information on the allocation of the net proceeds, to be renewed annually until full allocation and as necessary thereafter in the event of new developments. This information will contain at a minimum:
1. The list of eligible green project categories and amounts allocated to these categories;
2. Balance amount of unallocated bond proceeds; and
3. A selection of project examples financed by the net proceeds of the Note.
By including this information in Link REIT’s integrated annual report, the allocation of net proceeds receives an external review by an independent third party.
Where feasible, Link REIT will include qualitative and (if reasonably practicable) quantitative environmental performance indicators on the eligible green projects. Link REIT will annually disclose impact reporting on our corporate sustainability website. Performance indicators may change from year to year and may include some of the following indicators:
1. List of eligible buildings that received third party verified green building certification;
2. Energy consumption reduced per square foot;
3. Greenhouse gas emissions reduced by an eligible green project;
4. Water consumption reduced; and
5. Amount of waste sent to landfill reduced.