HSBC Australia is building on its position as a leading player in sustainable finance by making green loans and sustainability linked loans available to a broader range of its commercial banking clients.
The increased access to green term loans, revolving credit facilities and sustainability linked loans will allow a greater number of companies than previously tap to into a fast-growing pool of capital that is dedicated to funding the global shift to a low-carbon economy.
HSBC Group is a global leader in sustainable finance and has led a number of industry-firsts in Australia, including acting as a lead manager for the first green bond issued by an Australian company in 2014 and as an adviser for the first green loan issued under Asia Pacific Loan Market Association principles in 2018.
“Sustainable finance has been readily available to larger companies in Australia but more difficult for others to obtain. It is now fast becoming a key discussion point in our debt refinancing activity and we expect to see accelerated take-up as the world recovers from COVID-19,” said Steve Hughes, Head of Commercial Banking, HSBC Australia.
“We had previously provided bespoke solutions to commercial banking clients seeking sustainable finance but have adapted our product range so that we can better respond to requests from this segment of our customer base,” Mr Hughes said.
A record volume of sustainable debt, or USD465 billion, was issued globally in 2019, up 78% from the previous yeari.
“Companies increasingly want to differentiate themselves by highlighting their commitment to sustainability and our loans allow them to do so, while also funding activities that will mitigage the risks that climate change presents to their business models,” said Hamish Kelly, Head of Global Banking, HSBC Australia.
HSBC Group was recently named the World’s Best Bank of Sustainable Finance in the Euromoney Awards for Excellence 2020 for the second consecutive year.
Green term loans and green revolving credit facilities are available for the financing or refinancing – in whole or in part – of new or existing eligible green projects. Examples of green projects include the production or transmission of renewable energy, adoption of clean transportation, and sustainable waste management.
Green loans require borrowers to repay the loan over a fixed period of time, and a green revolving credit facility allows borrowers to draw funds up to a limit, repay and redraw.
Sustainability linked loans offer a discount on a loan’s interest rate margin if a company reaches pre-determined sustainability performance targets, such as a reduction in water consumption or a decrease in green house gas emissions. Borrowers may also be penalised with an increase in a margin for failing to meet the pre-agreed targets.
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About HSBC Bank Australia
In Australia, the HSBC Group offers an extensive range of financial services through a network of 45 branches and offices. These services include retail and commercial banking, trade finance, treasury and financial markets, payments and cash management and securities custody. Principal HSBC Group members operating in Australia include HSBC Bank Australia Limited (ABN 48 006 434 162 AFSL/Australian Credit Licence 232595) and The Hongkong and Shanghai Banking Corporation Limited (ABN 65 117 925 970 and AFSL 301737).