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Allen & Overy advises Port of Newcastle on ESG-focused refinancing

Allen & Overy has advised Port of Newcastle (“PON”) on its ground-breaking refinancing transaction, including the introduction of a green loan and sustainability linked loan facilities.

The refinancing and new facilities reflect the changing face of financing transactions for infrastructure assets participating in the commodity supply/export logistics chain.

Green loans developed out of the green bond market. Essentially, they represent a loan that is to be applied for the purpose of funding a specific environmental project/impact. A sustainability linked loan is a loan whereby the performance of the borrower is measured against certain agreed ESG KPIs, with that performance triggering certain outcomes (usually an adjustment to the margin).

PON is the largest deepwater port on the East Coast and provides a key gateway between key sectors of the Australian economy and global markets. Trade via the port is estimated to contribute about $26 billion to Australia’s national economy each year. 

Sectors supported by the Port’s operations include agriculture, energy and minerals.

“As a crucial trade gateway to global markets, the Port of Newcastle takes its responsibility to adhere to high levels of social and environmental sustainability seriously,” said partner James Abbott, who led the Allen & Overy team on the transaction. 

“To that end, PON is the first Australian port to complete a refinancing transaction including a green loan and sustainability linked loan facilities. The inclusion of both a green loan and a sustainability linked loan in a facility is testament to PON’s commitment to ESG issues and the appetite of the bank market to support these products.

“Our team at Allen & Overy is proud to be supporting PON as it works towards these goals.”

The Allen & Overy team comprised financing partner James Abbott with associates Catherine Dawson, William Khun and Kevin Lee. 

RBC Capital Markets acted as financial adviser to PON during the refinancing. NAB was the sustainability adviser. 

For more information, please contact James Abbott.