Taiwan-listed trading affiliate and retailing company Test Rite International, Tsai Wang Enterprise launched ESG-linked refinancing. The firm has launched a total of $376m of seven-year refinancing with ESG-linked. The lead arranger and bookrunner of this term loan is Taiwan Business Bank. This would comprise a NT$6.8bn tranche A as well as tranche B for as much as NY$4.2bn.
Tranche A covers interest margin offering of 64bp over the one-year post office savings rate. On the other hand, tranche B purchases a margin over the same benchmark for 69bp. Both tranches have 1.7% pre-tax interest rate floors. This margin can be reduced by 1bp when the borrower can reach one of the four ESG metrics and they could get a 3bp reduction if they could meet all the ESG criterias.
ESG is a potential sector in the company’s performance especially in the Taiwan Stock Exchange’s Corporate Governance Evaluation Results. The project covers carbon emissions reduction from cross-docking operations, electricity consumption, and anything related to energy saving investment. In this scenario, MLAs with $2bn or more will get the upfront fee of 10bp. On the other hand, the managers with $1.5bn-$1.9bn would earn 8p. 5bp free would be the offering for participants taking $1bn-1.4bn.
If the lenders could commit before July 1, they can receive an early-bird fee of 3bp. This is because the deadline for the final day is July 8. The funds allocation is to refinance a seven year loan of a NT$8.8bn. Previously, the borrower raised it in October 2019. In addition, the NT$3.8bn of five-year borrowing for Up Master Investment would complete in May 2018. The guarantors on the loan are Tony Ho Test Rite’s president and Judy Lee, the chairperson.
