CBA and APM Set Up First Social Loan in Australia
The Commonwealth Bank of Australia (CBA) and APM Human Services International Limited have executed a social loan, marking a first for Australia's sustainable financing sector. The loan proceeds from APM will be used to fund initiatives and endeavours that benefit key populations both domestically and abroad.
Social loans are a type of Use-of-Proceeds sustainable finance product that is used to fund projects and activities that solve a social problem or help a group of people, especially those who are underserved, marginalised, or vulnerable.
APM's social loan is in line with the Social Loan Principles of the Asia Pacific Loan Market Association (APLMA), which are based on APLMA's criteria for creating jobs, getting access to essential services (like health care), making social and economic progress, and giving people more power.
The net money from the social loan will be used to pay for or refinance funds for APM to provide social services to people with disabilities, the unemployed, and other vulnerable groups.
APM got the first social-labelled corporate debt facility in Australia by showing that its employment services, health and wellbeing services, disability and aged care support services, and community and assessment services align with social projects that help a wide range of target populations.
CBA was the only one in charge of coordinating the $840 million social loan facility and a key lender. Skye Capital was the "Debt Advisor" for the deal, and DNV gave a "Second Party Opinion."
Michael Thorpe, Managing Director of Future Cities and Networks at Commonwealth Bank, said:
“APM’s key business focus is to deliver social good, and we’re delighted to have worked with APM to develop an innovative sustainable finance solution to help recognise the important social contribution APM makes to communities in Australia and internationally.”
Charles Davis, Managing Director, Sustainable Finance and ESG at CBA, said:
“Our sustainable finance capabilities help clients promote their ESG credentials to broader stakeholders and get recognition for the important social impact work they undertake.”
“APM’s social loan marks a significant step in the development of Australia’s sustainable finance market, opening a new avenue for institutions to promote their social credentials. This is another example of how the sustainable finance market is becoming more holistic and expanding beyond the green and environmental focus to recognise social contributions by issuers,” Mr Davis said.
Steve Fewster, Chief Financial Officer at APM, said:
“We are proud to have the first social loan corporate facility in Australia. The Social Loan demonstrates the social impact of the services APM provides to more than 1 million people every year and goes to our purpose of enabling better lives. "