The success of MINT’s landmark ESG financing in Thailand in mid-2024 confirmed the importance and future potential of sustainability-linked transactions for Asia’s capital markets.
This THB 8 billion ($237 million) issuance of debentures comprised a THB 5 billion sustainability-linked bond (SLB) and THB 3 billion standard bond. It was a milestone in ESG financing domestically and for the area – the primary of its form inside Thailand’s hospitality sector, in addition to Asia’s first SLB for a corporation on this trade.
Buyers actually responded favourably, with robust participation from high-quality accounts regardless of lingering volatility in international markets leading to an oversubscription of over seven instances the preliminary goal situation dimension.
On the similar time, MINT was capable of reinforce by way of this transaction the significance it locations on making a significant impression.
“The overwhelming investor demand along with MINT’s sturdy credit score profile enabled us to safe funding at very aggressive charges for refinancing excellent debt, thereby bringing down the corporate’s total funding price,” defined Chaiyapat Paitoon, chief monetary officer. “The SLB additionally reiterated our long-standing dedication to embracing sustainability practices.”
Giving buyers what they need
Basically, SLB issuance is projected to develop in 2025, with Moody’s Scores forecasting a 14% improve this 12 months to $35 billion.
MINT has already seen how robust investor urge for food will be. Its total supply garnered sturdy demand of greater than THB 36 billion from greater than 80 institutional and cooperative buyers, surpassing the preliminary goal situation dimension of THB 5 billion and representing 7.3 instances oversubscription.
Such participation additionally mirrored confidence in MINT’s efficiency after its fast post-pandemic restoration, plus the corporate’s dedication to sustainability initiatives. Consequently, MINT took the chance to train a THB 3 billion Greenshoe Possibility, bringing the overall transaction as much as THB 8 billion.
“This refinancing transaction aligns with our plan to enhance our monetary metrics and optimise our monetary leverage stage,” added Chaiyapat Paitoon at MINT.
Placing sustainability on the core
The transaction additionally performed a key half in sharpening and deepening MINT’s deal with sustainability as integral to its enterprise technique.
The issuance concerned drafting a sustainability-linked financing framework and acquiring a second social gathering opinion from Sustainalytics to make sure alignment with worldwide tips and requirements.
Finally, the corporate’s Sustainability Efficiency Targets (SPTs), related to SLBs, embody the next:
• KPI 1: Scope 1 and a pair of GHG emissions depth of Minor Motels (tCO2e per room offered)
• SPT1: Cut back Scope 1 and a pair of GHG emissions depth to 0.018 tCO2e per room offered by FY2026 from a FY2019 baseline of 0.023 tCO2e per room offered
• KPI 2: Water withdrawal depth of Minor Motels (m3 per room offered)
• SPT2: Cut back water withdrawal depth to 0.68 m3 per room offered by FY2025 from a FY2022 baseline of 0.75 m3 per room offered
The KPIs goal the GHG emissions depth and water withdrawal depth of Minor Motels, which symbolize a big majority of Minor’s total emissions and water withdrawals, and can be the biggest contributor to Minor’s income.
But MINT’s unwavering dedication to sustainability and accountable practices isn’t just a company duty; it is a ethical obligation, defined Dillip Rajakarier, group chief government officer (CEO) and CEO of Minor Motels.
He added that the issuance “serves as a reaffirmation of our dedication to make optimistic adjustments, not solely inside our operations, however hopefully all through all the trade.”
To assist obtain this, the corporate prioritises the creation of shared worth to learn everybody by way of its sustainability efforts.
“Our dedication is demonstrated by way of our formidable internet zero targets, intensive group engagement programmes throughout our working areas, and devoted conservation initiatives to guard biodiversity in delicate ecosystems,” stated Chompan Kulnides, chief sustainability officer of MINT.
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