From sustainable water technology to financing for electric vehicles, renewable energy and green buildings: ING supported multiple sustainability transactions in the first quarter of 2019. Many of these were sustainability finance ‘firsts’, as ING empowers clients to transition to a low-carbon economy. The first green bond for auto leasing company LeasePlan, the first sustainability improvement loan in the US general industrial sector, and the first green bond in the Philippines to fall under ASEAN standards were among the 12 sustainable bond and 16 sustainable loan transactions we participated in during the quarter.
Accelerating electric cars
ING acted as joint bookrunner for the first-ever green bond issued by LeasePlan. With 1.8 million vehicles on the road in over 30 countries, LeasePlan is one of the world’s leading auto-leasing companies. Proceeds from the €500 million green bond will fund the purchase of battery-powered electric vehicles, accelerating the transition to electric driving – integral to LeasePlan’s sustainability strategy.
LeasePlan aims to achieve net zero emissions from its total fleet by 2030, supporting the effective implementation of the Paris Agreement and climate-related UN Sustainable Development Goals.
“With the proceeds being put solely towards the company’s battery electric fleet, this green bond issue supports LeasePlan’s sustainability strategy in a very specific way,” said Zsuzsanna Fekete, head of Industrial Corporates at ING in the Netherlands. “It also fits our sustainability strategy of empowering clients in transitioning to a low-carbon economy.”
First for the Americas
ING was joint lead arranger and sustainability coordinator in the first-ever sustainability improvement loan in the Americas: an $800 million five-year revolving credit facility for US-based Xylem, a leading water technology company and an industry leader in sustainability. This is the first time a general industrial company has issued a sustainability-linked loan in the Americas.
“Sustainability-linked finance is not a developed market in the US – just a few such deals have been done – but happily we’re starting to see that change,” said Anne van Riel, head of Sustainable Finance at ING in the Americas.
The interest rate on the loan is linked to Xylem’s environmental, social and governance (ESG) rating from Sustainalytics, a top provider of ESG research and ratings. If the rating goes up, the interest rate goes down – and vice versa.
It’s a construction ING pioneered in 2017, when we worked with health technology company Philips to create a revolving credit facility whose pricing was linked to Philips’ Sustainalytics rating.
“Xylem’s core market is water metering, treatment solutions and water technology, so sustainability is at the core of their strategy and Xylem is very serious about its commitment to ESG,” explained Van Riel.
Rizal’s ground-breaking bond
In the Philippines, ING was sole green structuring advisor to Rizal Commercial Banking Corporation (RCBC) in the issue of its first green bond. This was also the first green bond in the Philippines to fall under the Association of Southeast Asian Nations (ASEAN) Green Bond Standards.
RCBC will use the proceeds to finance and refinance projects relating to renewable energy, green buildings, clean transportation, energy efficiency, and pollution prevention and control – helping to reduce the environmental footprint in the Philippines.
“RCBC is moving towards more sustainable practices and having this framework supports that drive,” said Hans Sicat, country manager at ING in Manila. “It also sends a clear message about where they want to go in terms of sustainability and their business in the future.”