AA REIT boosts liquidity with $700m sustainability-linked, green financing

The ESG-linked loans extend its debt maturity profile to four years.

AIMS APAC REIT (AA REIT) has secured new unsecured sustainability-linked loan (SLL) facilities totalling $450m and $145.6m (AU$160m), alongside a separate $104.65m (AU$115m) syndicated loan with a green tranche, it said in a press release.

The refinancing increases AA REIT’s liquidity and diversifies its funding sources. Pro forma weighted average debt maturity extends from 2.2 years to about 4.0 years, with 100% of its debt remaining unsecured after the refinancing.

AA REIT said it will link financing terms to sustainability performance and allocate green financing to eligible assets within its Australian portfolio.

United Overseas Bank (UOB) acted as sole coordinator, mandated lead arranger, bookrunner, and sustainability coordinator for the SLL facilities.

The SLL carries margin adjustments linked to sustainability performance targets, including reductions in Scope 2 carbon emissions, expansion of solar energy capacity across the portfolio, and an increase in the proportion of green leases with tenants.

The separate $104.65m (AU$115m) syndicated facility was arranged by UOB Sydney branch and Australia and New Zealand Banking Group Limited.

The facility includes a $45.5m (AU$50m) green loan tranche linked to Optus Centre, which holds a 5.5-star National Australian Built Environment Rating System rating.

(AU$1 = SG$0.91)

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