With sustainability becoming high on the agenda of many sponsors’ boards and with Environmental, Social and Governance (ESG) matters becoming a focal point in debt markets, Elgar Middleton can assist in incorporating ESG-linkage into any debt facility.
Sponsors are increasingly driving the inclusion of an ESG-framework in their debt structure.
ESG-linked loans seek to encourage sponsors to improve their sustainability performance through a monetary reward for complying with pre-agreed targets, and a penalty for missing them.
This is typically achieved by including an ‘ESG ratchet’ on the margin. See below an indicative margin ratchet framework.
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Elgar Middleton can incorporate ESG-linkage into a variety of different debt products including revolving credit facilities, senior term loans and mezzanine debt.
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