KCC releases sustainability-linked financing framework and completion of USD 190 million refinancing
Oslo: Klaveness Combination Carriers ASA releases a sustainability linked financing framework linked to the Company’s carbon intensity reduction ambitions and announces the completion of a USD 190 million sustainability linked facility refinancing, the first financing facility completed under the Framework.
KCC signed its first sustainability-linked bank loan in mid-2020, making it the first sustainability-linked bank debt facility in Norwegian shipping. After the current refinancing, KCC’s entire mortgage debt portfolio is sustainability-linked, further cementing the Company’s position as a leader in decarbonization of deep-sea shipping.
Sustainability-linked financing framework
The Framework is developed in accordance with the Sustainability-Linked Bond Principles established by the International Capital Markets Association, and the Sustainability Linked Loan Principles established by the Loan Market Association. Under the Framework, KCC may issue both bonds and bank loans.
The Framework is linked to the Company’s carbon intensity reduction targets defined as CO2 emissions per ton of transported cargo per nautical mile, also called the Energy Efficiency Operational Indicator (“EEOI”). The ambition is to reduce the EEOI from 7.6 in 2018 to 5.3 by year-end 2026 and further to 4.1 by year-end of 2030, which implies an approximate 46% reduction by year-end 2030 compared to 2018.
DNV has provided a second party opinion (“DNV SPO”) of the Framework.
The Framework and the DNV SPO is published on www.combinationcarriers.com under the Investor Relation pages.
Completion of the USD 190 sustainability linked facility
The mentioned USD 190 million facility is provided by DNB Bank, Skandinaviska Enskilda Banken, Sparebank 1 SR-Bank and Sparebanken Vest as Mandated Lead Arrangers, DNB Bank as Agent and Skandinaviska Enskilda Banken as Sustainability Coordinator. The facility is a 50/50 revolving credit facility/term loan facility. The refinancing released ~USD 38 million in additional capacity based on the drawn and undrawn amounts under the existing facilities and has a tenor of approximately 5 years and is repaid on a close to 18-years average age adjusted profile. It bears interest of Term SOFR + 2.1% and the margin will be adjusted up or down on an annual basis based on KCC’s EEOI performance in relation to the trajectory in the Framework.
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