Renewi plc set out to convert its existing main banking facility into a green loan, with the wider goal of making all the company’s future issuance green.
The deal involved putting in place a €412.5m green multi-currency RCF and a €137.5m green multi-currency term loan, with both facilities maturing in 2023 and subject to two further one-year extensions.
A green European private placement (EUPP) facility of up to one third of the total facility was added in December 2018 and €25m issued.
As part of the process, Renewi adopted a Green Scorecard, which set out five sustainability-linked KPIs, each of which will reduce the loan margin.
The judges were impressed by the innovative features and green benefits of the deal, which has enabled Renewi to add CSR objectives
Those KPIs included increases in recycling and recovery rates, growth in carbon avoidance and transition to a low-polluting Euro VI fleet.
The deal also established a Green Finance Framework, which requires the company to report annually and confirm that its green assets exceed its green liabilities – one of the first such frameworks to apply both the LMA Loan Principles and the ICMA Bond Principles to the entire group.
The judges were impressed by the innovative features and green benefits of the deal, which has enabled Renewi to add corporate social responsibility objectives and promote the company’s sustainability focus in equity investor communications.
Renewi’s debt facilities have enabled the company to contribute to the circular economy in a number of ways, including recycling and recovering 89% of the 14 million tonnes of waste received annually, avoiding the carbon which would otherwise be emitted to generate new raw materials and improve fleet efficiency.
“Renewi is completely migrating its whole capital structure to sustainable finance, bringing verifiable benefits.”
Provider ABN AMRO, ING et al
Structure €575m green RCF, green term loan and green EUPP facilities
Metroline, one of Transport for London’s (TfL’s) largest bus providers, impressed the judges with a very different, but equally compelling, example of sustainable financing.
Embarking on a programme to replace a legacy diesel fleet with hybrid and electric buses, Metroline was seeking a flexible asset finance solution that would enable the company to accelerate its replacement programme, while further improving its sustainability credentials.
The company secured five-year funding via Lloyds’ Clean Growth Finance Initiative, which provides discounted funding to support investments in sustainable business. Metroline was the first company to access funding from the initiative.
As a result of the funding, Metroline was able to purchase 37 new double-decker hybrid buses, and support Metroline in its plans to operate London’s first fully electric, zero-emission double-decker services in 2019.
The company is also on track to begin operating a further 69 hybrid buses and 68 fully electric buses across other London routes in the coming year.
Beyond these benefits, the funding has also given Metroline the capacity to bid for further TfL contracts in the knowledge that the company is able to secure additional vehicles where needed.
“This deal fits into the London green initiative, with Metroline setting out to finance something profoundly sustainable.”
Provider Lloyds Banking Group
Structure Five-year asset finance facility
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This article was taken from the Deals Edition 2019 issue of The Treasurer magazine. For more great insights, log in to view the full issue or sign up for eAffiliate membership