Deal: Sydney Airport has embarked on a syndicated sustainability linked loan, notably an Australian-first, according to King & Wood Mallesons.

Value: $1.4 billion

Area: Sustainability, Aviation, Infrastructure

Key players: King & Wood Mallesons’ team was led by partner Yuen-Yee Cho with senior associate Zoe Anderson, solicitor Hilary Qin and graduate Anita Wu.

For Allens, partner Renee Boundy was joined by senior associates Edward Chuah and Elise Ho, and lawyer Kate Buchanan.

Deal significance: The sustainability linked loan is the first of its kind in Australia, according to King & Wood Mallesons, with it being noted as the first syndicated sustainability-linked bank facilities in Australia, the largest sustainability-linked syndicated facilities in Asia-Pacific, and the largest sustainability-linked syndicated facilities for an airport globally.

The firm noted that the loan comprises secured syndicated bank debt facilities with maturities of three to five years, with loan pricing to increase or decrease depending on Sydney Airport’s sustainability performance.

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King & Wood Mallesons said sustainability performance will be measured against a range of environmental and social impact metrics in line with the ‘Sustainability Linked Loan Principles’ and assessed by an independent third party, Sustainalytics.

Allens further explained that the sustainability links incentivise environment, social and governance outcomes by Sydney Airport group members.

Acting for the syndicate of major domestic and international lenders, Allens named the joint sustainability co-ordinators and bookrunners as Australia and New Zealand Banking Group Limited and BNP Paribas.

King & Wood Mallesons’ Yuen-Yee Choo said the firm is “delighted” at the opportunity to assist Sydney Airport on the market-leading financing.

“This innovative transaction demonstrates Sydney Airport’s commitment towards sustainability by linking its sustainability performance to pricing under the facilities,” she continued.

“As far as we know, it is also the first transaction closed in this market applying the LMA/LSTA/APLMA Sustainability Linked Loan Principles after their publication as recently as March this year,” she highlighted.

Allens’ lead partner Renee Boundy also weighed in, stating that her team is “thrilled to act on this first of its kind transaction for Sydney Airport and the lenders”.

“As a member of the APLMA’s Green and Sustainable Loan committee, and a big fan of the product, it’s encouraging to see real commitment from such a large number of lenders to deliver a product that recognises and rewards the ESG improvements and establishes a transparent regime by which lenders – and the market – can benchmark ESG performance,” she continued.

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