Norton Rose Fulbright advises Deutsche Bank on innovative sustainability-linked loan to Halcyon Agri Corporation

Global law firm Norton Rose Fulbright has advised Deutsche Bank on a US$25 million sustainability-linked loan facility to Corrie MacColl – a subsidiary of Halcyon Agri Corporation Ltd. – to finance the company’s capex investments for its rubber plantations in Cameroon and Malaysia.

Halcyon Agri Corporation is a Singapore-based supply chain manager which specialises in the origination, production and distribution of natural rubber.

The deal includes an accordion feature to upsize the facility to US$75 million. The proceeds of the loan will be used for the maintenance of Halcyon’s rubber plantations while promoting its Cameroon Outgrower Programme, which aims to provide additional food security and boost the income of 13,000 local smallholder farmers.

As part of the deal, Corrie MacColl and Halycon Agri will be required to comply with the mutually agreed sustainability framework developed by Environmental Resources Management (Singapore) Pte Ltd. (ERM). ERM will be responsible for reviewing the key performance indicators of the loan and setting the sustainability performance targets embedded in the framework of the financing facility.

Head of Singapore Yu-En Ong, who led the Norton Rose Fulbright deal team, which also included Singapore associate Kai Ye Ang, commented:

“We are pleased to have assisted our client on such a unique deal. The loan structure, and the detailed nature of the KPIs for the loan will set new standards for the rubber industry. It is also a strong precedent for the commodities industry, as it sets a fine example that sustainable business practices can also be commercially sound. We look forward to advising on more of these innovative lending structures to help businesses achieve their corporate social responsibility goals.”

Norton Rose Fulbright Singapore has advised on a number of recent sustainable financing transactions.

In 2019, the firm advised Frasers Property Limited’s A$750 million five-year term loan facilities, of which part of the loan marked the first in Singapore with a pricing structure link to the BCA Green Mark.

In 2018, the firm also advised GuarantCo on an INR2.5 billion bond issuance, which marked the first green bond issued in Indian Rupees by a Singaporean corporate and also the first international green bond issued in accordance with both ASEAN Green Bond Standards and ICMA’s Green Bond Principles.