ABP completed a sustainability-linked interest rate swap repack transaction with Aviva Investors, the global asset management business of Aviva plc and BNP Paribas.
Marina Wyatt, chief financial officer, at ABP, said: “ABP recognises that it has an important role to play in helping the UK to reach net zero, and decarbonising our own operations is a vital part of this. We are proud to be partners for the first swap repack transaction with sustainability-linked key performance indicators, demonstrating our commitment to sustainability. We have reduced our absolute Greenhouse Gas Emissions by 36% since 2014, and this underlines our ambition to continuous improvement and even greater reductions in the future.”
The 30-year Sterling Overnight Index Average (SONIA) linked interest rate swap transaction is believed to be the first SONIA-linked interest rate swap institutional repack transaction and the first institutional repack transaction to have sustainability-linked key performance indicators (KPIs) attached to it. The performance targets were subject to second party verification by ISS Corporate Solutions, to ensure they were both sufficiently material and ambitious in nature, whilst also remaining aligned to Loan Market Association sustainability-linked loan principles.
As part of the deal, a discount is offered to ABP on its hedging rate, provided that ABP meets certain sustainability-linked KPIs. These KPIs require ABP to achieve a significant reduction in its combined Scope 1 and Scope 2 emissions by 2030, building on the 36% reduction it has achieved in its absolute greenhouse gas emissions since 2014.