Sumitomo Mitsui Banking Corporation has announced the launch of Sustainability-Linked Loan (“SLL”) financing for its overseas Japanese customer’s “environmentally and socially beneficial” activities.
More specifically, the loans apply to the customers’ Environmental, Social, and Governance (ESG) and Sustainable Development Goals (SDG) activities.
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The objective of SLLs is to link corporate loan terms with a customer’s performance against mutually-agreed, sustainability performance targets consistent with a customer’s sustainability strategy.
“The objective of the SLL is to incentivise customers to improve their sustainability performance,” the bank said in a release.
Sumitomo arranges SLLs in accordance with the Sustainability-Linked Loan Principles published by the Loan Market Association, Loan Syndications and Trading Association, and Asia Pacific Loan Market Association.
The first syndicated loan
The first SLL financing was extended to Bridgestone Americas, Inc. and closed by Sumitomo as sole arranger, administrative agent and sustainability coordinator on January 31, 2021.
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By GlobalDataThis is the first SLL financing arranged by Sumitomo for an overseas Japanese customer.
The loan was successfully syndicated amongst a club of banks. It features a sustainability-linked pricing adjustment mechanism tied to Bridgestone Corporation’s ESG evaluation scores as assessed by Sustainalytics and FTSE Russell.
The financing was structured by SMBC in accordance with the SLLPs and pertinent market guidance.
The bank’s target 2930
As announced on April 13, 2020, the Sumitomo Group has established “SMBC Group GREEN × GLOBE 2030”, a ten-year plan that extends to 2030 based on the Sustainability Statement.
“Particularly, in order to take actions in solving environmental issues, a target of JPY 10 trillion has been set for Green Finance to be achieved by the end of FY2029,” the bank said.
“Based on the Sustainability Statement, SMBC will engage and act together with customers and other stakeholders to contribute to the global transformation into a better society.”
