CitizenM has secured a dual currency sustainability-linked loan totalling €480 million from HSBC, ABN AMRO Bank and Aareal Bank.
The €243.3 million and £201.7 million funding is tied to CitizenM achieving ESG targets which include CO2 reduction specifically in terms of operating emissions as well as improving the existing green building certifications of its European hotel assets.
CitizenM currently operates 31 hotels worldwide and has a further 14 in development.
The funding was provided equally by ABN AMRO Bank, Aareal Bank and HSBC (UK and Continental Europe), with HSBC UK acting as facility agent and HSBC Continental Europe acting as sustainability linked loan co-ordinator. This is HSBC UK’s Commercial banking team’s first SLL in the hospitality sector.
Sustainability-linked loans have grown exponentially in the past few years as companies face increased pressure from investors to show their sustainability credentials. Data from Bloomberg found the issuance of sustainability linked loans grew from $241.6 billion in 2017 to over $863 billion in 2022.
What they said
Klaas van Lookeren Campagne, CEO at CitizenM, said: “At CitizenM, we take sustainability seriously. We seek to build and operate hotels that minimise our impact on the environment, and it is important to us that our ongoing commitment to sustainability is reflected in every facet of our business. For this reason, we are immensely proud to have secured sustainability-linked funding, particularly given the complexity of the transaction, completed by a diverse lender group across Europe.”
Elizabeth Davies, head of hotels at HSBC UK, said: “We’re very proud to have completed this deal with CitizenM. With its high profile in the hospitality sector, we expect that CitizenM’s relatively early adoption of the Sustainability Linked Loan will help to drive further market adoption, as hospitality groups seek to demonstrate a serious commitment to creating positive impacts on the environment.”
Michelle Weiss, head of hotel properties at Aareal Bank, said: “As the Lender of the first CitizenM properties in Amsterdam back in 2008, we are pleased that we can continue to strengthen our long-standing relationship with CitizenM and support the company’s commitment to sustainability targets with the refinancing of this portfolio. Hotels remain a key growth driver for Aareal Bank's commercial lending portfolio.”
Fred Bos head commercial clients sector, sustainability and E&E expertise at ABN AMRO, said: “We see climate change as the greatest threat to humanity. We view this cooperation as a positive step towards the prevention of climate change and as an opportunity to grow our loan book in a responsible way. We look forward to scaling what we have achieved with this financing structure more widely across the highly attractive hotel industry.”