Head, Sustainable Finance, Products and Strategy. Sustainability linked loans aim to facilitate and support environmentally and socially sustainable economic activity and growth. They help us get to know you a little and how you use our website. (authorised and regulated by the Central Bank of Ireland) in Europe and BMO Capital Markets Limited (authorised and regulated by the Financial Conduct Authority) in the UK and Australia. They are a relatively recent innovation, but volumes have risen dramatically over the past few years to over US$99bn in 2018. In some instances, an SLL can be structured to allow it to be categorized as both a green loan and a sustainability-linked loan. ING Belgium S.A./N.V. The sustainability performance is thereby linked to the underlying margin of the loan, in relation to pre-agreed sustainability performance targets. (member FDIC), Bank of Montreal Europe p.l.c, and Bank of Montreal (China) Co. Ltd, the institutional broker dealer business of BMO Capital Markets Corp. (Member FINRA and SIPC) and the agency broker dealer business of Clearpool Execution Services, LLC (Member FINRA and SIPC) in the U.S., and the institutional broker dealer businesses of BMO Nesbitt Burns Inc. (Member Investment Industry Regulatory Organization of Canada and Member Canadian Investor Protection Fund) in Canada and Asia, Bank of Montreal Europe p.l.c. Sustainability-linked loans (SLLs) have touched down in Canada, allowing lenders to support clients in achieving their sustainability goals and pursue a sustainable future together. DBS is the first Asian bank to be appointed as a co-sustainability coordinator for LDC’s first sustainability-linked syndicated loan in Asia. The Sustainability Linked Loan Principles (SLLP) have been developed by an experienced working party, consisting of representatives from leading financial institutions active in the global syndicated loan markets. This helps us provide a more valuable and tailored experience for you and others. BMOCMC Client Relationship Summary. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction. However, if Fagron is not able to meet at least two of the KPIs at its next annual sustainability analysis, the loan will become more expensive. Sustainability linked loans aim to facilitate and support environmentally and socially sustainable economic activity and growth. What’s On The Mind of Third Party Agents? The agreed terms stipulate that the credit margin can be reduced if Fagron manages to meet its sustainability targets. For press inquiries and info, click here. Last week, Fagron has entered into a sustainability-linked loan agreement with a syndicate of six banks: ING Belgium, BNP Paribas Fortis, Belfius, Commerzbank, HSBC and KBC. About INGING Belgium is a universal bank that provides financial services for private individuals, businesses and institutional customers. The Sustainability Linked Loan Principles (SLLP) have been developed by an experienced working party, consisting of representatives from leading financial institutions active in the global syndicated loan markets. Sustainability targets can be internal - defined by the borrower in line with their global sustainability strategy - or external - assessed by independent providers against external rating criteria. The terms of this loan are determined in part by the borrower's achievements with regard to sustainability. ING Belgium who drafted the credit terms and coordinated the refinancing for Fagron's sustainability-linked loan, integrated this KPI mechanism into the pricing of the loan. First of all, Sustainability Linked Loans (SLLs) are not the same thing as green loans. Sustainability Linked Loans are linked to the borrower's sustainability performance measured against Environmental and/or Social and Governance criteria ("ESG"). Crew) or “uptiering” (Serta Simmons) structures. According to Environmental Finance data, the sustainability-linked loan market has grown from $5 billion in 2017 to $40 billion in 2018. ING Bank’s more than 53,000 employees offer retail and wholesale banking services to customers in over 40 countries. Fagron’s operational activities are driven by the Dutch company Fagron BV. ING has dedicated Sustainable Finance teams across regions, including Belgium. This transaction marks an important milestone for both institutions and is another clear example how sustainable finance solutions support the transition to a greener future. Media Resource Center Content, Copyright © 2019–2020 Loan Syndications & Trading Association, A presentation of recent decisions of interest to the lending community, including decisions on cram down (Tribune), 1111(b) election (Murray Coal), fraudulent transfer liability (Nine…, On September 29th, the LSTA hosted a webinar, Recent Distressed Liability Management Transactions: Lessons for the Loan Market, presented by Meyer Dworkin, Jason Kyrwood, Brian…, On Tuesday, LSTA EVP Meredith Coffey chaired a panel at the IMN Virtual LIBOR Conference that focused on how to transition the thousands of loans…, Over the past few years borrowers have used aggressive and controversial distressed liability management techniques like “dropdown” (J. Fagron BV’s head office is located in Rotterdam. Sustainability forms an integral part of ING’s strategy, evidenced by ING’s ranking as Leader in the banks industry group by Sustainalytics and ‘A’ rating in MSCI’s ratings universe. The term ‘green loan’ refers to a loan that is used to finance a specific green purpose. Examples of Sustainability Performance Targets. The loan category is gathering momentum globally, with initial demand coming from European, Asian and American investment grade companies with a strong commitment to improving their environmental, social and governance (ESG) performance. It is a Key Perfor Sustainability Linked Loans - Leverage your ESG Rating. Presented by Meredith Coffey of LSTA, Michael…, Sustainability Linked Loan Principles (SLLP), LSTA/Refinitiv Mark-to-Market Pricing Data. Green and sustainability linked loans are a hot topic in the loan markets. This is a three-year USD 650 million revolving credit facility where the interest rate will be linked to LDC’s performance in meeting reduction targets in CO 2 emissions, electricity and energy consumption, water usage, and solid waste sent to landfills. You can revoke cookies at anytime at the bottom of the page. BMO Capital Markets entered into an agreement this week to provide Maple Leaf Foods with the first, BMOCMC Fixed Income Commentary Disclosure, BMOCMC FICC Macro Strategy Commentary Disclosure. The rise of green and sustainability linked loans signals the early stages of a … Sustainability-linked loans (SLLs) have touched down in Canada, allowing lenders to support clients in achieving their sustainability goals and pursue a sustainable future together. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. BMO Capital Markets entered into an agreement this week to provide Maple Leaf Foods with the first sustainability-linked loan in Canada. ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. is a subsidiary of ING Group N.V. via ING Bank N.V. (www.ing.com). Borrowers must clearly communicate their sustainability objectives, setting ambitious and meaningful sustainability performance targets that apply over the life of the loan. ING Group shares are listed on the exchanges of Amsterdam (INGA NA, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N). Unlike green bonds or green loans, proceeds from SLLs are not required to be allocated to specific green projects and can be used for general corporate purposes. Similar to green bonds, SLLs allow lenders to work with clients to help them achieve a wide range of sustainability goals, attaching financial terms to targets that are negotiated and set between the borrower and the lender(s). BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. The initiative is the first of its kind in the luxury industry, but similar loans have been making inroads elsewhere. The role of lenders in promoting sustainable development has received a helping hand with the issuance of the Sustainability Linked Loan Principles. © 2014 ING Belgium SA/NV, tous droits réservés, Baromètre des investisseurs / BeleggersBarometer, Residential Mortgage Pandbrieven Programme. About FagronFagron is a leading global company active in pharmaceutical compounding, focusing on delivering personalised medicine to hospitals, pharmacies, clinics and patients in 36 countries around the world. ING Group shares are included in major sustainability and Environmental, Social and Governance (ESG) index products of leading providers STOXX, Morningstar and FTSE Russell. John Uhren is Head, Sustainable Finance, Products and Strategy, at BMO. Sustainability-linked loans are any type of loan instrument that incentivizes borrowers to achieve meaningful, predetermined sustainability objectives. Pricing grids are fixed at closing and any pricing incentive is based on whether the borrower hits or misses its sustainability target. ING is  proud to have been able to assist Fagron for their KPI linked Sustainability Improvement Loan as sole sustainability coördinator, next to being Facility Coordinator and  Agent. The use of SLLs grew rapidly in 2019, with particular popularity in Europe (where around 80% of … In…, This presentation was done for IMN’s Virtual Investors’ Conference on LIBOR that took place on September 29, 2020. SLLs, on the other hand, can be applied for any purpose (whether ‘green’ or not), but an in-built pricing mechanism means that the loan is cheaper if the borrower achieves certain sustainable or ESG (environmental, social and governance) related targets. Membership in the LSTA offers numerous benefits and opportunities. The Belgian company Fagron NV is located in Nazareth and is listed on Euronext Brussels and Euronext Amsterdam under the ticker symbol ‘FAGR’. The goal of an SLL is to improve borrowers’ sustainability profiles by linking credit facilities to sustainability performance targets over a broad array of categories, from basic energy efficiency to reductions in greenhouse gas emissions related to the borrower’s line of business. Annual Virtual Series 1: Historical Lessons to Guide our Path Forward, Annual Virtual Series 2: State of the Leveraged Syndicated Loan Market: Defining the Recovery, Annual Virtual Series 3: LIBOR Transition: What Business Needs to Know, Daily S&P/LSTA Leveraged Loan 100 Index Stats, Recent Developments in Bankruptcy Law Sept. 30th Presentation, Recent Developments in Bankruptcy Law Sept. 30th Additional Material, Recent Distressed Liability Management Transactions Presentation, Recent Distressed Liability Management Transactions Webcast Replay, Operational Readiness in the Loan and CLO Market, Sustainability-Linked-Loan-Principles-May-2020.pdf. Episode 24: Canadian Energy and Innovation: Part 1, Episode 23: TC Transcontinental – A Market Leader in Sustainable Packaging, Episode 22: International Children’s Rights, Episode 21: The Positive Impact Initiative, Charting a Green and Just Recovery from Pandemic, Energy Savvy Companies Can Now Reduce Borrowing Costs, Episode 14: Integrating ESG Practices in Mining, Record-breaking World Bank Sustainability Bond, BMO Financial Group to Source 100 Per Cent of Electricity Usage From Renewables, Episode 13: Responding to COVID-19 through Sustainable Finance, Episode 12: Intersecting biodiversity and economic development, In defence of Davos: The world works best when we work together, NGOs and business can work together to achieve inclusive economic growth, Rotenberg: E.S.G.s Have Moved Out Of The Niche, BMO launching new suite of ESG ETFS, and some big-name companies didn't make the cut, 2019 Sustainability Report and Public Accountability Statement, Kristi Mitchem in Conversation: Opportunities in ESG, Episode 10: Sustainable Finance is the new normal, Blockchain as a Tool to Advance Sustainability, Banking the Transition to a More Sustainable Future, Climate change engagement: a framework for the future, Dollars for Dialogue: A Novel Approach to ESG, Episode 09: The power of collaboration in ESG investing, Episode 08: Pricing Climate Risk with Bob Litterman, Episode 07: World Bank: Mobilizing Capital Markets for Sustainable Finance, Episode 06: Responsible Investing – Industry Trends and Best Practices from Canada, Episode 05 Climate Change: Transitions and opportunities, Episode 04: Sustainability Disclosures: reporting with SASB, Episode 03: Green Taxonomy: The EU Sustainable Finance Action Plan, Episode 02: Analyzing Climate Risk for Financial Markets, Episode 01: Understanding Green and Sustainable Bonds, Disclosures: BMOCMC Fixed Income Commentary Disclosure  |  BMOCMC FICC Macro Strategy Commentary Disclosure  |  Research Disclosure Statements |