KWM helps deliver landmark Sustainability Linked Loan for Sydney Airport

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King & Wood Mallesons (KWM) has advised Sydney Airport on its syndicated $1.4bn Sustainability Linked Loan, the first of its kind in Australia.

Comprising secured syndicated bank debt facilities with maturities of three to five years, the loan pricing will increase or decrease depending on the sustainability performance of Sydney Airport. Sustainability performance will be measured against a range of environmental and social impact metrics in line with the Sustainability Linked Loan Principles (also known as SLLPs) and assessed by independent third party, Sustainalytics.

The transaction is a "first" in many respects, namely:

  • the first syndicated sustainability linked bank facilities in Australia
  • the largest sustainability linked syndicated facilities in Asia-Pacific
  • the largest sustainability linked syndicated facilities for an airport globally

The KWM team was led by Partner Yuen-Yee Cho, with support from Zoe Anderson (Senior Associate), Hilary Qin (Solicitor) and Anita Wu (Law Graduate).

Yuen-Yee Cho said KWM are delighted at the opportunity to assist Sydney Airport on this market-leading financing.

"This innovative transaction demonstrates Sydney Airport's commitment towards sustainability by linking its sustainability performance to pricing under the facilities.  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 continued.

The transaction was widely supported by Sydney Airport's relationship banks who comprise a consortium of domestic and international banks.

KWM is at the forefront of Australian market developments in sustainable financing and social impact investment, having advised on a number of pioneering green, social and sustainable financing transactions across a range on sectors, including Adelaide Airport's bilateral sustainability linked loan in December 2018, the NSW TCorp green bond, the recent inaugural Woolworths green bond and the green, social and sustainable kangaroo bond issuances from a range of international development and policy banks.