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A $4.5 Billion Loan Marks Record ESG-Linked Deal for Asia

(Bloomberg) —

Agrochemicals company Syngenta Group (HK) Holdings Co. has completed Asia’s biggest-ever sustainability-linked loan, coming as the global market for such debt has slowed sharply this year.

The maker of genetically modified seeds has entered into a $4.5 billion 3-year syndicated loan, it said Thursday. 

The initial size of the deal was several times oversubscribed, according to Syngenta, which also called the term-loan facility the largest of any kind in the Greater China region this year. The firm had previously intended to borrow $1.5 billion with a possible $1 billion increase, Bloomberg News reported in March. 

The global volume of sustainability-linked loans (SLLs), which tie interest rates to corporate sustainability targets, has fallen nearly 40% this year as inflation drags down fixed-income markets, according to data compiled by Bloomberg. But activity this year is on pace to top 2021 levels in Hong Kong, where Chinese firms have been syndicating such loans. 

The facility for Syngenta “has a sustainability feature whereby there would be a reduction in interest margin if certain sustainability performance targets are achieved in a particular year,” a spokesperson said when asked about the deal. “These sustainability performance targets are closely linked to Syngenta AG’s Good Growth Plan, which sets out our global commitments to accelerate our innovation to provide solutions for farmers.”

Those targets include providing safety training to a minimum number of farm workers, and cumulative investment in sustainable agriculture breakthroughs, according to details the spokesperson provided. 

Syngenta Group (HK) is a part of Syngenta Group Co.

Formerly listed in Switzerland, Syngenta Group was taken private several years ago and is now owned by Sinochem Holdings Corp.

Hong Kong Emerges as Hub for Chinese Firms Seeking ESG Loans

The loan facility is with a syndicate of banks from various jurisdictions led by the Agricultural Bank of China Limited Hong Kong Branch, Bank of China (Hong Kong) Ltd., China Construction Bank Corp., Hong Kong Branch and Credit Agricole Corporate and Investment Bank.(Adds further details throughout)

–With assistance from Catherine Bosley.

© 2022 Bloomberg L.P.


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