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EQUITES PROPERTY FUND LIMITED - Conclusion of R1.6 billion ESG-Linked Facility Agreement

Release Date: 09/09/2020 16:00
Code(s): EQU EQT004 EQT002 EQT003 EQT005     PDF:  
Wrap Text
Conclusion of R1.6 billion ESG-Linked Facility Agreement

EQUITES PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/080877/06)
JSE share code: EQU ISIN: ZAE000188843
Debt company code: EQUI
(Approved as a REIT by the JSE)
(“Equites” or the “company” or the “group”)


CONCLUSION OF R1.6 BILLION ESG-LINKED FACILITY AGREEMENT

On 28 August 2020, Equites concluded a R1.6 billion sustainability-linked facility agreement (“the Facility”) with The
Standard Bank of South Africa Limited (“Standard Bank”). The Facility is comprised of two tranches, Tranche 1 and
Tranche 2, each of R800 million and will be applied towards part-financing the acquisition of a controlling interest in Retail
Logistics Fund (Pty) Ltd, an entity that will own the Shoprite facilities identified in the SENS announcement released on 25
February 2020. This Facility represents a significant step forward towards recognising the vital importance of environmental,
social and corporate governance (“ESG”) in enhancing sustainability and it embodies Equites’ commitment towards acting
as a responsible corporate citizen.

Tranche 2 is an 18-month, partially secured facility which was agreed at an interest rate of 3 month JIBAR + 155bps. The
margin reflects the group’s conservative financial profile, its robust credit metrics and evidences the resilience of its property
fundamentals. The facility agreement includes an ESG pricing mechanism linking the all-in cost of debt to Equites’ ESG risk
rating score. Equites’ maiden comprehensive ESG Risk Rating Report depicts an ESG Risk rated as “Low Risk” with a peer
relative performance in the top third of the global REIT Subindustry. A sustainability-linked facility agreement of this nature
is unprecedented in the South African REIT sector and is in line with global best practice. Furthermore, there is latitude to
embed this ESG pricing mechanism into a longer-dated facility agreement in future.

Equites’ ESG rating has been assessed by Sustainalytics, a global leader in ESG and Corporate Governance research and
ratings. The ESG rating is determined with reference to an ESG Risk Rating which evaluates, inter alia, Corporate
Governance, ESG Integration, Product Governance, Human Capital and Business Ethics.

Laila Razack, Chief Financial Officer of Equites said: “The conclusion of this facility agreement with Standard Bank is
testament to the relationship forged with the bank over the past 5 years. The ability to execute a facility of this quantum and
pricing in an environment marred by the COVID-19 crisis supports the assertion that a lowly-geared balance sheet with a
high-quality underlying portfolio lends itself to attractive pricing. We are delighted to be pioneering sustainability-linked
funding in a SA REIT context, as it demonstrates our commitment to ESG in the business and the importance thereof in the
global context. We would like to thank Standard Bank for their ongoing support and commitment to Equites and look forward
to a long and prosperous journey ahead.”
Nigel Beck, Executive & Global Head Sustainable Finance within Standard Bank added: “Partnering closely with Equites to
better understand their business has allowed us to build a seamless, multi-disciplined sustainable funding solution. Equites
have effectively demonstrated that African companies can structure financing packages linked to performance against ESG
targets, thereby aligning their business goals with sustainability targets. This structure supports Standard Bank’s own Social,
Economic and Environmental (SEE) shared value strategy, which seeks to deliver business success in a way that improves
the human and natural environments in which the bank operates. Standard Bank is proud to be pioneering sustainability-linked
funding in the SA REIT sector with Equites and we would like to thank them for their valued partnership.”

9 September 2020

Sponsor
Java Capital

Debt Sponsor
Nedbank Corporate and Investment Bank, a division of Nedbank Limited
Date: 09-09-2020 04:00:00
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