NYK pens $840M worth of sustainability loans

Japanese shipping major NYK has signed two sustainability-linked loan (SLL) agreements worth $840 million.

LPG powered VLCC; Image credit: NYK

The first loan, secured with Sumitomo Mitsui Banking Corporation is worth $600 million, will take the form of a revolving credit facility.

The second loan, worth $240 million, has been obtained through a syndicate of several banks including Iyo Bank, Bank of Saga, Shikoku Bank, Nomura Trust and Banking Co., Hachijuni Bank and MUFG Bank.

“The objective of the SLL is to promote and support environmentally and socially beneficial economic activities by linking corporate loan terms with a customer’s performance against mutually agreed sustainability performance targets (SPTs) consistent with a customer’s ESG strategy,” NYK said.

The SPTs in both agreements are to maintain a high climate change disclosure score. As long as high CDP ratings are achieved, the interest rate terms will remain unchanged until the repayment deadline.

The contract period is five years.

These two agreements bring NYK’s total number of SLLs to four.

The most recent loan was signed in February 2021 worth $50 million with the compatriot Shiga Bank.

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The loan’s interest rate is linked with the company’s score on environmental and sustainability governance as well as efforts to combat climate change.

“NYK’s goal is to support ESG management and is in line with the company’s ESG management strategy,” the company said.