In June Irish insulation maker Kingspan Group completed a new €700 million Planet Passionate Revolving Credit Facility. The new five-year facility, which matures in May 2026, with an extension option for a further two years, replaces the Group's outgoing RCF (€451 million) and acquisition (€300 million) facilities.
The Planet Passionate facility is provided by a syndicate of 10 leading international banks and is to be used for general corporate purposes. The facility has an in-built pricing incentive on the achievement of Kingspan’s Planet Passionate commitments and is therefore fully aligned with the wider strategy of the Group.
As a sustainability linked loan that can be used for general corporate purposes, the loan is linked to an agreed set of sustainability metrics, which are a subset of those within Kingspan’s ESG annual report. A margin reduction is provided by the lenders if these are met by Kingspan Group.
“We are very pleased to complete this financing with a top tier of international banks, who can support Kingspan in all of our key markets, regionally and globally. When combined with the green private placement bond of €750 million completed in December 2020, Kingspan has arranged €1.45 billion of sustainable debt funding over the last six months,” said Kingspan chief financial officer Geoff Doherty, speaking after the announcement.
HSBC acted as sustainability coordinator, documentation coordinator and tier one lender on this benchmark transaction in the Irish market.
“Kingspan is a global leader in sustainability and started their sustainability journey over 10 years ago. The company has been recognised by MSCI as AA rating, CDP 2020 Climate A list and London Stock Exchange’s new Green Economy Mark classification,” says Tanya Sexton, director of large corporates, HSBC Ireland.
“The Planet Passionate Revolving Credit Facility complements the €750 million “Green Private Placement Facility” which Kingspan executed in 2020 and was the largest green private placement globally at the time. Kingspan publishes an annual ESG report on its Planet Passionate programme, which outlines their framework and publishes progress on 12 measurable targets across four areas: energy, carbon, circularity and water.”
HSBC has had a long-standing relationship with Kingspan over 15 years and has been engaging with management on sustainable finance for several years, she says.
“HSBC provide banking services to Kingspan across several regions they operate in and have gained a detailed knowledge of their business as a result. HSBC is delighted to support them with this next step in sustainable financing,” says Sexton.
HSBC has an ambitious climate strategy and has committed to aligning the financed emissions from its portfolio of customers to net zero by 2050 or sooner.
To help achieve this, it has set a target of providing between $750bn and $1tn of finance and investment towards the transition. Since the beginning of 2020, it has provided $87 billion of sustainable finance and investments and the pace of deployment is speeding up as more and more customers embrace sustainable finance.
It has also set up a dedicated unit called HSBC Ventures to manage a technology venture debt fund that will target investment of up to $100 million for supporting clean tech innovation companies.
In May this year it launched a new philanthropic programme with a target to donate $100 million between now and 2025 aimed at unlocking barriers to finance for companies and projects that tackle climate change and to bring emerging climate solutions to commercial viability and scale.
It has developed a Centre of Sustainable Finance which provides in-depth research and thought leadership about transforming the real economy in response to climate change. It regularly runs webinar and learning sessions within the group and with external clients to promote sustainability. It has also established a dedicated ESG Solutions Unit which provides advice, expertise and financing solutions to clients around the world and has rolled out dedicated sustainability training which all employees are encouraged to access.
“Sustainability is quickly becoming a core part of our DNA within HSBC and it is a topic which is at the forefront of our minds,” says Sexton.
