RGE, a Singapore-headquartered multinational group of resource-based manufacturing companies, today announced the closing of a three-year, US$1 billion Sustainability-Linked Loan (SLL) for its sustainable agribusiness group consisting of Asian Agri and Apical and a US$1 billion Sustainability-Linked Derivative (SLD) interest rate swap.
RGE’s Latest SLL, Oversubscribed 1.4 Times, Marks Entry into Islamic Financing
The international consortium of Mandated Lead Arrangers and Bookrunners for RGE’s latest Sustainability Linked Loan (SLL) included Commercial Bank of Dubai (CBD) and First Abu Dhabi Bank (FAB).
The SLL, oversubscribed 1.4 times on its US$1 billion amount, highlights the region’s increasing interest in sustainable finance, with RGE’s contribution aiming to unlock US$2 trillion in economic growth for the GCC region by 2030.
RGE’s SLL, which includes a US$150 million Murabaha term facility that is AAOIFI-compliant, also marks its inaugural Islamic financing.
This catalyses the company’s continued strategic expansion into key regions, including the Middle East, where Apical’s local operations are witnessing exponential growth.
RGE Applauds Banking Partners’ Support for Latest SLL; CBD and FAB Celebrate Successful Closure of Landmark Transaction
Patrick Tan, Head of Banking, RGE, said: “We are delighted to have the overwhelming support of our banking partners, including CBD and FAB, for our latest SLL. It is a vote of confidence in our growth and sustainability journey.
The US$150 million part of the financing, which is both sustainability-linked and Islamic, represents a relatively new financing structure in the industry. We hope to further strengthen our relationships with Islamic financial institutions in the Middle East to support the region’s growth in green financing.”
Abdul Rahim Al Nimer, General Manager – Corporate Banking at CBD, said: “We are pleased to announce the closure of this landmark SLL transaction which underscores the close relationship between CBD and RGE. We are proud to be a part of RGE’s journey.
Leading another successful market deal is a true testament to CBD’s robust capabilities and ongoing commitment to backing our customers’ ambitions.”
Fawaz Abusneineh, Acting Head of Global Corporate Finance at FAB, said: “This marquee transaction underlines FAB’s leadership in global Islamic and sustainable financing, and the Group’s growing profile as a gateway facilitating trade and investment between the MENA and Southeast Asia regions.
We look forward to continuing collaboration and to being the partner of choice for RGE’s banking requirements in the MENA.”
Strategic Expansion: RGE’s US$1 Billion SLL in the Middle East and Asia Targets Agribusiness Growth and Sustainability Goals.
The Middle East is a strategic region for RGE, with Dubai acting as a gateway to increase RGE’s trade flows to the EMEA region while Singapore is the other gateway to Asia.
RGE will utilize the US$1 billion SLL to support its agribusiness operations, fostering growth and expansion across a range of diverse product offerings. The SLL is also linked to key performance indicators (KPIs) to enhance:
- Engagement with the number of suppliers carrying out independent traceability verification
- Utilisation of energy derived from renewable and clean energy sources
- Collaboration with NDPE-compliant suppliers
A third-party sustainability consultant independently validated the pre-agreed KPIs for the SLL, serving as a tool to help the company better align its efforts to accelerate the achievement of its sustainability targets.
Failure to meet the KPIs set as part of the financing agreement will result in the company having to pay a higher interest rate on the loan.
Sustainability in Finance: RGE Closes a US$1 Billion SLD Interest Rate Swap to Hedge Risks and Advance Ethical Agribusiness Practices in Asia.
Concurrently, RGE closed a US$1 billion SLD interest rate swap, tying it to the same KPIs as the SLL, to hedge interest rate risks and enhance accountability.
By embedding sustainability throughout the traceable and transparent supply chain, from cultivation to consumption, Asian Agri and Apical will enhance the value for its customers and partners, offering them environmentally and ethically sustainable products.
This commitment aligns with the key actions discussed at the recently concluded COP28, where government and private sector leaders pledged to accelerate decarbonisation and the pace of change.
Apart from CBD and FAB, the other MLABs are E.SUN Commercial Bank, Ltd., Hua Nan Commercial Bank, Ltd., Industrial Bank Co., Ltd, MUFG Bank, Ltd. (MUFG), Shanghai Pudong Development Bank Co, Ltd. and Bank of Communications (Hong Kong) Limited.
MUFG is the Lead Sustainable Finance Advisor on the transaction, with CBD and MUFG as Joint SLD Coordinators, and FAB as the Islamic Advisor.
Dedicated to responsible growth and expansion, RGE, one of the largest global producers in the bioeconomy, has transitioned its financing to SLLs, manufacturing source materials for life’s essential goods used by billions daily.
In the year ended 2023, RGE has successfully secured more than US$1 billion of SLLs.
