ANZ's Largest Sustainable Credit Fund in Asia-Pacific
In its recent announcement, ANZ revealed its role as the Joint Sustainability Coordinator in facilitating PAG's groundbreaking sustainability-linked subscription line credit facility for its Private Debt strategy-managed funds.
This achievement marks a significant milestone for both PAG, a prominent investment firm in the Asia-Pacific region, and the market as a whole.
The facility establishes a connection between the interest rate margin and the fund's sustainability performance. By consistently meeting four key performance indicators, the facility triggers a reduction in total interest paid over its term. Conversely, failure to meet these indicators leads to an increase in total interest.
ANZ played a vital role as the Joint Sustainability Coordinator, spearheading the development of a sustainability-linked finance framework that adheres to market best practices and global standards.
This framework provides guidelines for PAG's private credit funds to incorporate sustainability-linked attributes into their financing activities. ISS Corporate Solutions provided a second-party opinion verifying the framework's alignment with the Loan Market Association Sustainability-Linked Loan Principles.
Anshumann Woodhull, PAG Partner and Co-Head of Private Debt, emphasised the importance of ESG impact in generating long-term value for investors and highlighted how this landmark sustainability-linked facility demonstrates their commitment to ESG principles and translates into enhanced returns.
Niamh Targett, ANZ Head of Financial Sponsors Asia, expressed delight in supporting PAG's milestone transaction. She emphasised that the unique structure of the facility enables meaningful engagement with borrowers to achieve improved sustainability outcomes while aligning with ANZ's sustainable solution strategy.
Ms. Targett also expressed ANZ's eagerness to forge continued partnerships with market leaders like PAG, driven by a shared vision for innovative solutions that deliver successful investment outcomes and positive societal impact.
Mara Chiorean, ANZ Director of Sustainable Finance, expressed hope that this transaction would serve as a blueprint for integrating sustainability-linked features in the private debt market.
She commended the facility's innovative mechanism for driving sustainability improvements in PAG's private credit portfolio companies, utilising various tools such as ESG integration in due diligence, climate-related contract clauses, and ESG training. Ms. Chiorean stressed the significance of this approach, as private credit portfolios present unique challenges in ESG stewardship and oversight.
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