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Summerset in sustainability-linked loan first

Retirement village operator Summerset Group’s $NZ700 million syndicated sustainability linked loan – the largest in the New Zealand loan market and first in the sector – has set the benchmark for sustainability standards within the aged-care industry. ANZ was sole sustainability coordinator and arranger.


The company has committed to three key sustainability performance targets - the roll out of memory-care suites and continuation of dementia-friendly accreditation, an emissions reduction target, and a reduction in construction waste to landfill. The targets are underpinned by Summerset’s corporate strategy around wellbeing, innovation and sustainability.


An example of its wellbeing and innovation strategy, the company developed a product line called ‘memory-care suites’ targeted at people living with dementia who need some level of support but not full-time care due to the advanced stages of the disease. The company has also prioritised the continuing training of its carers to maintain standards.


“The SLL format allows us to work with borrowers to devise meaningful and ambitious performance targets that reflects the company’s broader strategy,” Dean Spicer, ANZ’s Head of Sustainable Finance – New Zealand said.


The KPIs selected by Summerset reflect their sustainability goals to “bring increased wellbeing to their customers and staff, by harnessing the power of innovation and weaving sustainability into their work,” Spicer said.

The structure of the industry also naturally lends itself to the multiple product formats within sustainable finance.


“The operators of residential care accommodations are often the property owners providing for social needs which lends itself to use-of-proceed type products,” Spicer said.


Summerset’s five-year SLL is part of a larger multi-currency refinancing including funds for future development, including expansion in Australia.


New Zealand’s aging population is driving the significant growth in demand for aged care and dementia facilities. One of New Zealand’s largest retirement village and aged care providers, Summerset is riding this growth with expansion plans nationally as well as into Australia.


Working with Summerset to achieve its sustainability objectives is a natural progression of the strong relationship with the bank, Adam Crane, Director – Institutional Relationship, ANZ said.


“Summerset’s ambition to be the sector leader in sustainability in New Zealand corresponds with ANZ’s rapidly expanding sustainable financial credentials,” he said.



The New Zealand sustainable finance market is expected to grow, helped along by a raft of government and industry initiatives as well as concerns by investors and communities about environmental risk.


“The regulatory push has raised these issues of climate change to the highest levels of companies,” Spicer said. “But there is also a genuine push from other stakeholders about managing climate risk.”


Regulatory and industry initiatives such as the Climate Change Commission’s report, the New Zealand Sustainable Finance Forum and the introduction of legislation to reduce net emissions of greenhouse gases to zero by 2050 have all helped propel climate change to the fore of public attention.


Similarly, bank demand to book sustainable finance loan assets is also increasing. The transaction was the largest syndicated SLL in the Kiwi loan market, attracting commitments from ANZ, Bank of New Zealand, Bank of China, Commonwealth Bank of Australia, Industrial and Commercial Bank of China and Westpac.


“The response from the market was strong with oversubscription from existing lenders and commitment from a new bank demonstrating increased demand to participate in syndicated sustainable financing,” Claire Fisher, ANZ’s Head of Loan Syndications & Agency – New Zealand said.


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