ING has used its expertise in the area of sustainability to help arrange the first-ever debt facility for a listed equity fund based on sustainable criteria.
The GBP 500 million revolving credit facility (RCF) was arranged for The Renewables Infrastructure Group (TRIG), a UK fund with a GBP 2.3 billion market capitalisation that invests in assets generating electricity from renewable sources.
ING acted as a lender and also coordinated the incorporation of sustainability criteria for the six-bank debt facility. The interest charged on the RCF is linked to TRIG’s performance against defined sustainability targets. These are based on environmental, social and governance (ESG) criteria, including among others an increase in the number of homes powered by clean energy from TRIG’s portfolio and an increase in the number of community funds supported by TRIG.
With over 73 renewable energy assets currently owned and managed by TRIG, this three-year facility will support the continued growth and flow of capital into the energy transition markets, supporting the sustainability commitments of both TRIG and ING.
This deal was a collaborative effort between Energy sector’s Renewables & Power team in Amsterdam and the Sustainable Finance team. “This successful financial close, and the TRIG fund’s steady growth from GBP 300 million at inception, shows the strong appetite from markets to support the energy transition and sustainability,” says TRIG parent account manager (PAM) Alistair Higgins. “The deal has also enhanced our reputation as leaders in this area – we now have other listed funds coming to us for help in implementing sustainability-linked loans.”
SONIA first use
In another first, the RCF for TRIG represents ING’s first application to a deal of the SONIA (Sterling Overnight Index Average) interest rate benchmark, and the first application of SONIA for a UK listed fund.
Alternatives to LIBOR have been under discussion since 2013, with a transition to SONIA slated for 2021. With the support of the client, and collaboration between ING’s IBOR-transition, legal and middle office teams, a financial close was achieved in 2020, something that was particularly important for a UK listed fund ahead of the UK leaving the EU at year end.
“This financing demonstrates ING’s ability to support its key clients in realising their strategic objectives and to execute collaboratively across various internal teams.” said Céline Borjans of the Renewables & Power team, who led the transaction to a successful close.