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Russell McVeagh Assists On Largest Sustainability Linked Loan In New Zealand

Russell McVeagh has assisted ANZ New Zealand Limited (ANZ) who, together with National Australia Bank (NAB), were joint Sustainability Coordinators for Kathmandu Holdings Limited's A$300m debt facility refinancing, which has included the establishment of a syndicated A$100 million sustainability linked loan (SLL) facility, the largest syndicated SLL in the New Zealand market to date.

With ANZ's support, Kathmandu successfully finished the refinance of its syndicated debt facilities recently with a three-year A$300 million facility, consisting of a A$100m sustainability linked loan and a A$200 million multi-option facility.

Kathmandu Holdings is the first New Zealand entity in the Apparel sector to enter into a Sustainable Finance transaction. The refinance incorporates a pricing mechanism that incentivises improvement in material sustainability metrics and was undertaken to provide ongoing liquidity in the uncertain COVID-19 environment.

Banking and Finance partner John Powell led the Russell McVeagh team advising on the refinancing, with assistance provided from Russell McVeagh solicitors Dan Zajac and Tom Blackwell.

"Being able to assist ANZ in helping to achieve financial arrangements that matched up to their client Kathmandu's sustainability goals, which will help them reinforce their commitment to sustainability across their business, has been hugely rewarding," said Powell.

The sustainability aspect of the new facility is underpinned by material metrics and targets of the Group such as greenhouse gas emissions, B Corp certification, and improving the transparency, wellbeing and labour conditions for workers in its supply chain. Achievement of these targets is linked to the borrowing costs of the facility. These sustainability-linked KPIs are unique to Kathmandu Holdings and are fully aligned to the Group’s continued commitment to its sustainability goals. The sustainability linked loan is fully aligned with the Sustainability Linked Loan Principles published in May 2020.

The refinance received strong backing from a range of domestic and international banks. Read more about the refinance here.

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