Financial services firm Nedbank has successfully concluded a R3.13-billion sustainability-linked revolving credit facility (RCF) for insurance and investment management firm Old Mutual.
The sustainability-linked loan facility aligns with and supports Old Mutual’s sustainability strategy and ambitions and delivers on an array of financial objectives for the group. These include a broader, more diversified lender group, as well as the option to extend the facility by up to one year, Nedbank says.
Old Mutual mandated Nedbank Corporate and Investment Banking (CIB) to take a leading role in structuring, coordinating and refinancing its maturing RCF by acting in several capacities, including mandated lead arranger, coordinator, sustainability coordinator, sustainability agent, documentation agent and publicity agent.
The new sustainability-linked RCF has been designed to underpin Old Mutual’s commitment to driving sustainable development progress. It does this by linking the terms of the loan to key performance indicators that focus on two key sustainability themes, namely reducing the intensity of carbon emissions and investment into small, medium-sized and microenterprise businesses, which are both sustainability priorities for Old Mutual and the country, says Old Mutual CFO Casper Troskie.
“The carbon-intensity reduction targets embedded in the RCF align with Old Mutual’s decarbonisation strategy and our commitment to climate change mitigation through our operations. The small, medium-sized and microenterprise targets underpin our long-standing commitment to leveraging the power of small and medium-sized enterprise development as an effective means of addressing poverty, inequality and unemployment in the country,” he points out.
“We recognise the interconnectedness between the economic, social and environmental systems we operate in, and the urgency to transform our collective growth path to one that is more socially inclusive, low carbon and resource efficient. Collaborating practically in this way enables us to transform the financial services sector to meet the changing needs of our people and planet,” adds Troskie.
Nedbank CIB was able to ensure an optimal financing outcome for Old Mutual, while simultaneously progressing systems value objectives aligned with the United Nations Sustainable Development Goals, says Nedbank CIB sustainable finance solutions head Arvana Singh.
“Nedbank CIB’s understanding of Old Mutual’s business and its sustainability and ESG ambitions, combined with its proven sector finance, sustainable finance and syndication expertise, were key in its ability to successfully lead, arrange, fund and implement the transaction,” she adds.