HKBN debuts up to HK$6.75 billion ESG-linked loan

Hong Kong broadband service provider HKBN (1310) is marketing its first sustainability-linked syndicated loan of as much as HK$6.75 billion, according to people familiar with the matter, as the popularity of ESG-related financing grows in the region.

Seven banks, including BNP Paribas, Credit Agricole, and DBS Bank, have underwritten the five-year transaction, the people said, asking not to be identified discussing private matters. 

The deal pays an opening interest margin of 220 basis points over the risk-free Hong Kong Interbank Offered Rate, the people added.

HKBN didn’t immediately respond to a request for comment.

Asia-Pacific companies have increasingly incorporated environmental, social and governance-linked elements into their financings as they look to boost their decarbonization efforts. 

Borrowers in Asia-Pacific outside Japan raised US$66.5 billion (HK$518.7 billion) of sustainability-linked loans in 2024, a 37 percent jump from the year prior, according to Bloomberg-compiled data.

The interest margin of HKBN’s latest facility is tied to its net leverage ratio, and will be reduced if the company meets targets related to its carbon emissions and staff training on cybersecurity issues, the people said.

US infrastructure-focused fund I Squared Capital has recently shown interest in HKBN, edging closer to a buyout offer, Bloomberg reported earlier this month. That could potentially set up a bidding war with China Mobile (0941) for the Hong Kong-listed broadband provider.

(Bloomberg)