BBVA served as sole sustainable agent in the first syndicated revolving credit facility in Latin America, signed with Fibra Uno, a strategic client for the bank. The transaction is also the first sustainable transaction by a real estate business in the region and the first facility to be arranged in accordance with the 'Sustainability-Linked Loan Principles’ in Latin America. BBVA was also the joint bookrunner and lead arranger in the transaction, which involved a total of 11 banks.
Fibra Uno, the largest and more diversified real estate company in Mexico and Latin America according to Fitch, chose BBVA to debut in the sustainable financing market. BBVA served as sole sustainable agent in the arrangement of this multi-currency facility, worth a total of MXN21.35 billion (€990 million or $1.11 billion) split into two tranches – the first worth MXN13.5 billion and the second $410 million. The rate of the facility is linked to the company’s credit rating and the performance of an environmental indicator such as the power consumption intensity of the assets managed by the company in kWh per every square meter occupied.
Vigeo Eiris, a sustainability rating company, considers that the transaction is aligned with the ‘Sustainability-Linked Loan Principles’ and is in line with FUNO’s corporate environmental commitments.
This new 5-year sustainable revolving credit facility replaces a previous MXN17 billion (about $885 million) line of credit signed in 2015.
Jorge Pigeon, FUNO vice-president of Investor Relations and Capital Markets, explained that: “A revolving credit line such as this one grants us the financial flexibility that we need to operate with maximum efficiency. Being able to use these resources at any time during the life of the credit facility is a key component of our financial strategy; furthermore, it is a sign of FUNO’s commitment to sustainable development in Mexico.”
Álvaro Vaqueiro, Head of Corporate & Investment Banking BBVA México, said that “the signing of this sustainable line of credit, the first under the RCF format and the first in the real estate sector in Latin America, represents a significant milestone for the bank, as it underpins our leadership position in sustainable financing in the region.”
BBVA, a leader in sustainable finance
As a sign of its firm commitment to the fight against climate change, BBVA launched its Pledge 2025 in 2018 through which the bank will mobilize €100 billion from now until 2025 in green financing, sustainable infrastructure, social entrepreneurship and financial inclusion. As of December 2018, the bank had already ensured almost €12 billion. The bank has the capacity, knowledge and experience to provide its clients superior advisory services for sustainable financial solutions and is playing a key role in developing this market.
BBVA has been a pioneer and is a dominant player in the sustainable loan business. Today it is one of the most active organizations on the world stage in this field and the indisputable leader in Spain. In 2018, BBVA led 17 sustainable finance deals in Europe and the Americas for customers in various sectors and acted as sustainability coordinator or agent in more transactions than any other institution. As of the end of June 2019, it has led 11 additional transactions.
FUNO is the top and largest REIT in Mexico and Latin America. It owns, develops and manages 559 properties in the industrial, commercial and office segments, totaling approximately 8.7 million square meter, with an occupation of 95.4 percent. Its portfolio of landmark assets includes Torre Mayor and Torre Diana, in Mexico City or La Isla in Cancun. It is currently developing mixed-use complexes, such as Mítikah, which will have the tallest high-rise in Mexico.
FUNO is very active in the debt market and seeks financing on an ongoing basis to move ahead with its expansion and growth plan. In June 2019, FUNO issued a €1 billion international bond, with BBVA acting as bookrunner. With these resources, FUNO will refinance its debt, extending its maturity profile and will continue developing its portfolio. The company expects to add over 60.000 square meter of properties to its total gross leasable area in 2019.
Also, this voluntary commitment, linked to its environmental performance, is in line with its 2016-2020 sustainable strategy, and demonstrates FUNO’s leadership in ESG-related matters in Mexico.