PRESS RELEASE | 25 May 2021, London – Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), has announced it has jointly completed an ESG-linked interest rate swap repack with BNP Paribas, and which has been provided to Associated British Ports (‘ABP’).
The 30-year transaction is believed to be the first SONIA-linked interest rate swap institutional repack and the first institutional repack transaction to have sustainability-linked key performance indicators (KPIs) attached to it. The performance targets were subject to second party verification by ISS Corporate Solutions, to ensure they were both sufficiently material and ambitious in nature, whilst also remaining aligned to Loan Market Association sustainability-linked loan principles.
As part of the deal, a discount is offered to ABP on its hedging rate, provided it meets certain ESG KPIs including a significant reduction in combined Scope 1 and Scope 2 emissions by 2030, building on the 36% reduction it has already achieved in absolute greenhouse gas emissions since 2014.
The agreement with ABP and BNP Paribas is the latest sustainability-linked financing Aviva Investors’ Real Assets business has invested in on behalf of Aviva UK Life, as it seeks to decarbonise its portfolio and transition to net zero by 2040. The transaction also highlights BNP Paribas’ commitment to innovating in sustainability-linked finance to support corporate and institutional clients in the shift to a net zero economy, and accelerate decarbonisation to meet the objectives of the Paris Agreement.
Munawer Shafi, Head of Structured and Private Debt at Aviva Investors, said: “We are delighted to have completed this innovative transaction with ABP and BNP Paribas. It demonstrates our ability to incorporate tailored sustainability considerations into bespoke transactions, without compromising on outcomes for borrowers or risk-adjusted returns for our clients. We hope this transaction will catalyse the adoption of ESG-linked transactions in the swap repack space”.
Matthew Ponsonby, Head of Global Banking, BNP Paribas UK explained: “Incentivising the net zero transition through finance can be a powerful mechanism to accelerate both the corporate and investor decarbonisation trajectory. This innovative transaction in a major sector like UK transportation highlights the value of sustainable finance extending into the derivatives market, whilst also demonstrating the need to support corporates such as ABP in holistically integrating transition targets into their financing needs”.
Marina Wyatt, Chief Financial Officer, Associated British Ports, said: “ABP recognises that it has an important role to play in helping the UK to reach net zero, and decarbonising our own operations is a vital part of this. We are proud to be partners for the first swap repack transaction with sustainability-linked key performance indicators, demonstrating our commitment to sustainability. We have reduced our absolute Greenhouse Gas Emissions by 36% since 2014, and this underlines our ambition to continuous improvement and even greater reductions in the future”.
For more information contact:
Aviva Investors Media Relations | +44 (0)20 7809 6745| email@example.com
BNP Paribas UK Media Relations | +44 (0)7469 403 542 | Sarisher.firstname.lastname@example.org
Group Head of Strategic Communications, Associated British Association
|07850501903 | Email: email@example.com
About ABP (www.abports.co.uk)
ABP is the UK’s leading ports group with 21 ports and other transport related businesses creating a unique national network capable of handling a vast array of cargo. The company contributes £7.5 billion to the UK economy every year and supports 119,000 jobs. Our current investment programme promises to increase further our contribution to regional economies around the UK. Our five-year investment programme across the group is worth £1 billion. Our investment is designed to respond to the needs of our customers whose business relies on our ports for access to international and, in some cases, domestic markets.
Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £366 billion in assets as at 31 December 2020.
BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 71 countries, with approximately 199,000 employees, of which more than 151,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance.