Hong Kong-based dry bulk vessel owner and operator Pacific Basin Shipping has closed a new $250 million sustainability-linked 7-year senior secured committed revolving credit facility for general corporate purposes.
“This is our second sustainability-linked financing facility which serves to extend our funding profile, reinforce our commitment to sustainable shipping, and strengthen our financial capacity as we continue to pursue growth opportunities arising especially in these times of uncertainty and turbulence,” Martin Fruergaard , CEO of the company, commented.
“The facility’s competitive pricing and oversubscription reflect the market’s support for Pacific Basin, our growth strategy and our initiatives to drive the resilience and long-term financial performance of our company in an increasingly complex international business landscape.”
As explained, the facility aligns financing with the shipping company’s corporate sustainability agenda by incorporating a tiered pricing mechanism that adjusts the interest margin based on actual performance (with reference to predetermined key performance indicators (KPIs)) against annual sustainability performance targets (SPTs). The chosen KPIs and SPTs relate to carbon intensity and crew safety, which are material environmental and social criteria in the shipping industry that the company prioritizes among its most important sustainability issues.
Pacific Basin engaged Moody’s Investors Service (Moody’s), a global provider of credit ratings, research and risk analysis, to provide a second party opinion that opines on the relevance of the KPIs and robustness of the SPTs, and on their alignment with Pacific Basin’s sustainability ambitions, including targeting net zero by 2050 and safeguarding the safety, security, health and wellbeing of the company’s staff at sea.
Back in December 2023, the Hong Kong-based shipping player concluded its first $150 million sustainability-linked 3-year senior unsecured committed revolving credit facility.
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In early 2024, the company also established a dedicated board-level Sustainability Committee to better align its business strategy with sustainability targets.
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A few weeks ago, the vessel owner signed a memorandum of understanding with Hong Kong and China Gas Company Limited (Towngas) to enhance its access to volumes of green methanol marine fuel.
As disclosed, the MoU establishes a framework for cooperation between the two companies for formalizing a supply agreement under which Towngas will supply Pacific Basin with green methanol. Pacific Basin said that green methanol as a marine fuel will become an “increasingly important” part of its fuel mix as the company grows its fleet of dual-fuel low-emission vessels and works toward lower-emission operations.