• Loan’s interest rate linked to three core sustainability KPIs
• Oversubscribed by a factor of more than two in both Thailand and Japan, demonstrating a significant step forward for Blue Finance
• Bookrunners include leading Japanese and Thai banks with major global financial institutions participating
Thai Union Group PCL (Thai Union), the world’s seafood leader, has closed its inaugural Sustainability-Linked Syndicated Loan (SLL) in both Thailand and Japan, the Company announced today.
This, Thai Union’s first SLL, is split into a credit facility equivalent to THB 6.5 billion, denominated in both Thai baht (THB) and United States dollars (USD), along with a USD 183 million-equivalent Ninja/Samurai credit facility denominated in USD and Japanese yen (JPY). Together, the two credit facilities are equivalent to THB 12 billion, with a term of five years. The SLL was oversubscribed by a factor of more than two times the initial facility size when first launched to the markets. The success of this closing represents a significant step forward for Blue Finance—financing related to projects that benefit our oceans—for both Thai Union and the industry as a whole,
Bank of Ayudhya PCL, Mizuho Bank, Ltd., and MUFG Bank, Ltd. are the Mandated Lead Arrangers and Bookrunners (MLABs) and Sustainability Coordinators for the syndicated loan. The SLL represents a milestone for Thai Union as the Company cemented the THB 6.5 billion-equivalent facility with its key onshore relationship banks including, as Lead Arrangers: KASIKORNBANK PCL; The Hongkong and Shanghai Banking Corporation Limited; and BNP Paribas; and as Arrangers: Oversea-Chinese Banking Corporation Limited, Bangkok Branch; and Sumitomo Mitsui Trust Bank (Thai PCL).
Thai Union was also able to leverage the Japanese MLABs’ investor network to enter the Japanese loan market for the first time with the raise of the USD 183 million-equivalent offshore facility. A further 19 financial institutions in Japan, including branches of foreign banks, have confirmed their participation in this offshore facility alongside the MLABs.
Interest rates for SLLs are linked to Key Performance Indicators (KPIs) around sustainability, with achievement leading to the borrower being rewarded with a reduction in interest rates. For Thai Union, these KPIs include maintaining the Company’s consistently high rankings in the S&P Global Dow Jones Sustainability Indices (DJSI); achieving the Company’s Greenhouse Gas (GHG) reduction targets; and increasing oversight in Thai Union’s international supply chains through an increase in the use of electronic monitoring (EM) and/or human observers onboard tuna vessels .
Sustainalytics was appointed Environmental, Social and Governance (ESG) provider to give a second-party opinion on the KPIs and alignment to the Sustainability Linked Loan Principles. Each KPI will be verified by external organizations to ensure a fair and independent evaluation.
“Thai Union has placed sustainability at the heart of our business and, with our global sustainability strategy, SeaChange®, now entering its next phase, we are very pleased to have launched this loan, said Thiraphong Chansiri, President & CEO of Thai Union. “This, our first Sustainability-linked Loan, reaffirms our commitment to driving meaningful change, not only in our own operations, but in the industry as a whole. The recognition from financial institutions of Thai Union’s sustainability initiatives is a testament to the hard work and success we have seen since the launch of SeaChange®, and demonstrates the growing, global focus on ethical business and investors’ desire to support companies that are truly seeking to make a difference.”
Seiichiro Akita, President and Chief Executive Officer of Krungsri (Bank of Ayudhya PCL and its business units) said, “We are very pleased to once again demonstrate our commitment to ESG financing by supporting Thai Union, a leading global company in their journey towards achieving their sustainability goals. All stakeholders have come together to work towards a common goal and successfully deliver this landmark Sustainability-Linked Loan, despite challenges including the global situation around COVID-19; setting rigorous yet appropriate KPIs; and current loan market sentiment in Japan and Thailand.
“This loan also demonstrates the strong synergy between Krungsri and MUFG, harnessing the ability of both institutions to offer support and connect the dots for our customers to achieve their goals both in Thailand and beyond. We would like to congratulate Thai Union on this great success, which is certainly a crucial milestone in their ESG and sustainability journey.”
Yasuhiro Kubota, Executive Officer, General Manager of Mizuho Bank, Ltd. Bangkok Branch said, “Mizuho would like to express our sincere congratulations to Thai Union for the successful closing of this Sustainability-Linked Loan both in Thailand and Japan and we are proud to be part of Thai Union’s world-class sustainability development. Thai Union is globally recognised as one of the world’s leading seafood companies and is an industry leader in sustainability management. Mizuho believes this remarkable SLL will contribute to Thai Union’s efforts to help eliminate Illegal, Unreported and Unregulated (IUU) fishing by enhancing the traceability of raw materials in the supply chain, which is a key reason that Mizuho is providing this financial support alongside the other participating banks.”
Richard Yorke, Managing Director and Head of Global Corporate & Investment Banking, Asia Pacific, MUFG Bank said: “MUFG is pleased to have supported Thai Union in its ongoing efforts at driving sustainability in its global business. By playing a leading role in this transaction, we were able to not only demonstrate MUFG’s commitment in partnering like-minded clients to bring about positive change but also show our ability to leverage our deep experience and expertise in green financing to structure a solution tailor-made to Thai Union’s unique requirements.
“More importantly, we were able to harness our extensive network in Asia, which includes Krungsri, to facilitate distribution both in Thailand and Japan, thereby diversifying the client’s investor base and further underscoring MUFG’s strong capital market capabilities. We would like to congratulate Thai Union once again for this successful transaction.”
ABOUT THAI UNION GROUP
Thai Union Group PCL is the world’s seafood leader, bringing high quality, healthy, tasty and innovative seafood products to customers across the world for more than 40 years.
Today, Thai Union is regarded as one of the world’s leading seafood producers and is one of the largest producers of shelf-stable tuna products with annual sales exceeding THB 126.3 billion (US$ 4.1 billion) and a global workforce of over 44,000 people who are dedicated to pioneering sustainable, innovative seafood products.
The company’s global brand portfolio includes market-leading international brands such as Chicken of the Sea, John West, Petit Navire, Parmentier, Mareblu, King Oscar, and Rügen Fisch and Thai-leading brands SEALECT, Fisho, Qfresh, Monori, Bellotta and Marvo.
As a company committed to innovation and globally responsible behavior, Thai Union is proud to be a member of the United Nations Global Compact, and a founding member of the International Seafood Sustainability Foundation (ISSF). In 2015, Thai Union introduced its SeaChange® sustainability strategy. Find out more at seachangesustainability.org. Thai Union’s on-going work on sustainability issues was recognized in 2018 and 2019 by being ranked number one in the world in the Food Products Industry in the Dow Jones Sustainability Index, achieving a 100th percentile ranking for total sustainability score. Thai Union has now been named to the DJSI for seven consecutive years. Thai Union was also named to the FTSE4Good Emerging Index for the fourth straight year in 2019.
Krungsri (Bank of Ayudhya PCL and its group companies) is the fifth largest financial group in Thailand in terms of assets, loans, and deposits, and one of Thailand’s five Domestic Systemically Important Banks (D-SIBs) with 75 years of history in the country. Krungsri is a strategic member of the Mitsubishi UFJ Financial Group (MUFG), Japan’s largest financial group and one of the world’s largest financial organizations. Krungsri provides a comprehensive range of banking, consumer finance, investment, asset management, and other financial products and services to individual consumers, SMEs, and large corporations through 670 branches (631 Banking Branches and 39 Auto Business Branches) and over 33,431 service outlets nationwide. The Krungsri Group is the largest card issuer in Thailand with 9.5 million credit cards, sales finance, and personal loan accounts in its portfolio; a major automobile financing service provider (Krungsri Auto); one of the fastest growing asset management companies (Krungsri Asset Management); and a pioneer in microfinance (Ngern Tid Lor PCL).
Krungsri is strongly committed to the highest level of integrity in conducting its business. All Krungsri Group companies have been awarded accreditation from the Private Sector Collective Action Coalition Against Corruption (CAC) in collaboration with industry peers and stakeholders on a zero tolerance approach to corruption.
ABOUT MIZUHO FINANCIAL GROUP
Mizuho Financial Group is one of the world’s largest full-service financial conglomerates with total assets of approximately JPY 217.90 Trillion as at December 2020. Mizuho has approximately 60,000 employees in 116 locations outside of Japan and over 140 years of banking experience offering comprehensive financial and strategic services, including banking, securities, trust and asset management, credit card, private banking and venture capital, through its group companies including Mizuho Bank and Mizuho Securities.
Mizuho will especially focus on indirect impacts generated through provision of financial and other services and through engagement with clients. Mizuho will provide our clients with multi-faceted support for initiatives addressing the Sustainable Development Goals (SDGs) and environmental, social and governance (ESG) concerns.
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with around 2,600 locations in more than 50 markets. The Group has over 180,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing.
The Group aims to “be the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.
MUFG Bank, Ltd. is Japan’s premier bank, with a global network spanning more than 50 markets. Outside of Japan, the bank offers an extensive scope of commercial and investment banking products and services to businesses, governments and individuals worldwide.
In Asia, MUFG has a presence across 20 markets – Australia, Bangladesh, Cambodia, China, Hong Kong, Indonesia, India, South Korea, Laos, Malaysia, Mongolia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.
It has also formed strategic partnerships with some of the most prominent banks in Southeast Asia, further augmenting its unrivalled network across the region – VietinBank in Vietnam, Krungsri in Thailand, Security Bank in the Philippines and Bank Danamon in Indonesia.
For more information, visit https://www.mufg.jp/english.