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Majid Al Futtaim raises $1.25b sustainability-linked loan

First Abu Dhabi Bank led the fund raising, the conglomerate’s second sustainability-linked loan, as sustainability coordinator and agent

Emirati retail conglomerate Majid Al Futtaim said on Monday it had raised a $1.25 billion revolving credit facility linked to the company’s environmental, social and governance (ESG) goals.

First Abu Dhabi Bank led the fund raising, the conglomerate’s second sustainability-linked loan, as sustainability coordinator and agent.

Majid Al Futtaim (MAF), which operates malls across the Middle East, “has set sustainability performance targets (SPTs) which will be measured on an annual basis throughout the tenor of the facility,” it said.

Ziad Chalhoub, chief financial officer at Majid Al Futtaim Holding, said sustainable finance options are a vital solution in the quest to ensure the private sector creates a resilient economy and supports development that meets the needs of the present without compromising the future.

"Today’s announcement maintains Majid Al Futtaim’s long-held commitment to becoming one of the most sustainably considerate companies regionally and globally. Through the new SLL, we are further extending our accountability in how we finance our operational and capital expenditures across the Group. As our second such SLL signed in as many years, we are aligning our actions with our long-term strategic target of reaching a Net Positive business model by 2040,” he said.

The loan aims to cut MAF’s Scope 1 and 2 emissions and implement LEED certification for its malls, the company said.

Leadership in Energy and Environmental Design (LEED) is a global green building certification.

MAF raised a $1.5 billion sustainability-linked loan in August last year.

In June, it raised $500 million with perpetual green bonds, refinancing existing hybrid bonds.

Mustafa Al Khalfawi, head of Global Banking UAE and global head of Government, Sovereigns & Public Sector at FAB, said: “We are proud to lead this transaction with Majid Al Futtaim and to support a key UAE entity in achieving its ambitious sustainability targets. FAB is the region’s leading bank for unlocking innovative sustainable finance solutions, having issued the first green bond in the GCC in 2017 and as the first UAE bank to commit to achieving net-zero greenhouse gas emissions across our operations and portfolio. There is strong and growing demand for sustainability-linked banking facilities from UAE and GCC corporates, and we are working closely with our clients to drive positive environmental outcomes.”

— With inputs from Reuters