AirTrunk announces new £2.3 billion sustainability linked loan
Thu 24 Aug 2023
AirTrunk has announced the refinancing of its corporate sustainability linked loan (SLL) to £2.3 billion (A$4.6 billion), more than doubling its initial £1.06 billion (A$2.1 billion) SLL which closed in September 2021.
The transaction will be used to refinance AirTrunk’s existing debt facilities and support the company’s rapid expansion across the region. This refinancing excludes AirTrunk’s existing ~£610 million (~A$1.2 billion) sustainable financing in Japan.
The SLL is the largest for a data centre operator globally.
Crédit Agricole CIB, Deutsche Bank and HSBC acted as joint Sustainability Structuring Agents for the SLL refinance. The three financing institutions, along with DBS, ING, Morgan Stanley and MUFG, also acted as mandated lead arrangers, underwriters and bookrunners (MLAUBs) for the loan.
Antoine Rose, Head of Sustainable Investment Banking, Asia-Pacific and the Middle East at Crédit Agricole CIB, said: “This transaction not only further solidifies AirTrunk’s strong sustainability commitment and positions the company as a global leader in the data centre sector, it also sets an exemplary benchmark for the industry.”
AirTrunk’s SLL links the company’s financing to meaningful and ambitious environmental and social commitments. The KPIs established as part of this SLL include carbon usage effectiveness (CUE), operating power usage effectiveness (PUE), operating water usage effectiveness (WUE), gender diversity and gender pay equity.
It is the first SLL to utilise a CUE metric, and therefore the first to combine CUE, WUE and PUE to ensure the highest level of environmental transparency and accountability for a data centre operator.
Kalpana Seethepalli, Director of ESG, APAC at Deutsche Bank, said: “Deutsche Bank is proud to have partnered with AirTrunk on a series of sustainable finance transactions as a Sustainability Structuring Agent, starting with their first KPI-linked syndicated loan in 2021. With each successive transaction, AirTrunk has demonstrated its commitment to driving innovation and transparency by redefining market leading KPIs – PUE, WUE, CUE – that are at the core of the data centre industry, and linked financing terms to the achievement of ambitious targets.”
The SLL also represents the first publicly known financing by a data centre company to incorporate a gender pay equity target.
Amanda Taylor, Managing Director, Head of Large Corporates and Sustainable Finance, HSBC Australia said: “AirTrunk is to be commended for its commitment to sustainability and innovation, demonstrated through this transaction. HSBC is delivering the power of its international network, coupled with local and regional expertise, in leading this landmark transaction. In our first collaboration with AirTrunk as both a MLAUB and sustainability structuring agent, we are pleased to support AirTrunk with this financing, to drive both environmental and social change through its business. Gender-based KPIs focused on increasing gender diversity and narrowing the pay gap are crucial steps in that progress.”
AirTrunk plans to invest all margin incentives from the SLL into social impact initiatives aligned to its four focus areas: Equal Digital Access, STEM Education, Biodiversity and Conservation, and Innovation and Research & Development.
The company first introduced its plans to invest margin incentives into social impact initiatives as part of its £330.5 million (~A$650 million) TOK1 SLL in Japan earlier this year, making it the first publicly known corporate to do so.
AirTrunk Chief Financial and Commercial Officer, Prashant Murthy, said: “In the last two years, we have announced the development of more than half a gigawatt of new capacity in APJ. This landmark SLL ensures that as we scale across the region, we do so as sustainably as possible, driving the industry forward by redefining sustainable financing standards.
“With an innovative combination of KPIs linked to the key environmental focus areas in the industry across carbon emissions, energy and water efficiency as well as gender diversity and equity, we are demonstrating our commitment to responsible and sustainable growth. The SLL KPIs also align to our Net Zero by 2030 strategy and further hold us accountable to achieve our climate goals.
“We will continue to work with our customers, employees, investors, financing partners, regulatory bodies and communities to drive innovations like these to advance a sustainable future,” Prashant concluded.
Since the establishment of its initial corporate SLL in September 2021, AirTrunk has announced four new developments in Western Sydney, Tokyo West, Johor Bahru, Malaysia, and Hong Kong.
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