CDB Leasing obtained its first ESG-linked syndicated loan in overseas markets, successfully raising US$420 million with a term of 3 years.
This syndicated loan is led by Bank of China Luxembourg and Agricultural Bank of China Limited Hong Kong Branch. Nanyang Commercial Bank and ANZ Hong Kong are participating lenders. The syndicated loan has been assessed and certified by the Hong Kong Quality Assurance Agency (HKQAA). It is the first sustainability-linked loan issued by a Chinese financial leasing company in overseas markets. It is CDB Leasing's first attempt to raise funds in overseas "green" markets to support the implementation of the carbon emission reduction strategy of the CPC Central Committee and the State Council. It is a pioneering innovation related to overseas financing in China's financial leasing industry.
ESG-linked syndicated loans are an innovative tool to finance low-carbon transformation. This financing tool incorporates sustainability into the daily operation and growth of businesses by setting environmental, social, and governance (ESG) goals. The interest rate of the 3-year syndicated loan will be adjusted based on CDB Leasing's fulfillment of ESG targets which is measured by predefined key performance indicators. This rate will be significantly lower than the current rates of loan facilities of the same term offered by foreign banks. Effective control of financing costs will help CDB Leasing improve stability in operations.
The successful formation of the syndicate shows the market's recognition of CDB Leasing's ability to fulfill ESG targets as well as its efforts to promote green finance and assist the Chinese government in achieving the "carbon neutrality" goal. In the future, CDB Leasing will continue to expand its leasing business and further expand green leasing and financing channels as part of its effort to contribute to the achievement of the carbon emission peak and carbon neutrality goals. It will continue to explore green financing models, minimize the carbon footprint of its activities, and work with other companies in the industry to tackle global climate challenges.