(London) – Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), has announced it has jointly completed an ESG-linked interest rate swap repack with BNP Paribas, and which has been provided to Associated British Ports (‘ABP’).
The 30-year transaction is believed to be the first SONIA-linked interest rate swap institutional repack, and the first institutional repack transaction to have sustainability-linked key performance indicators (KPIs) attached to it. The performance targets were subject to second party verification by ISS, to ensure they were both sufficiently material and ambitious in nature, whilst also remaining aligned to LMA sustainability-linked loan principles.
As part of the deal, a discount is offered to ABP on its hedging rate, provided it meets certain ESG KPIs, including a significant reduction in combined Scope 1 and Scope 2 emissions by 2030, building on the 36% reduction it has achieved in absolute greenhouse gas emissions since 2014.
The agreement with ABP and BNP Paribas is the latest sustainability-linked financing Aviva Investors’ Real Assets business has invested in on behalf of Aviva UK Life, as it seeks to decarbonise its portfolio and transition to net zero by 2040. The transaction also highlights BNP Paribas’ commitment to innovating in sustainability-linked finance to support corporate and institutional clients.
Munawer Shafi, Head of Structured and Private Debt at Aviva Investors, said:
“We are delighted to have completed this innovative transaction with ABP and BNPP. It demonstrates our ability to incorporate tailored sustainability considerations into bespoke transactions, without compromising on outcomes for borrowers or risk-adjusted returns for our clients. We hope this transaction will catalyse the adoption of ESG-linked transactions in the swap repack space.”
Ashish Dafria, Chief Investment Officer, Aviva UK Life, said:
“As a business with a long-term focus, ESG and sustainability is at the heart of what we do at Aviva. In order to deliver strong customer outcomes, both long term economic and environmental sustainability are key considerations for us and go hand in hand. We are pleased to support what is believed to be the first sustainability linked swap repack with ABP, a long-term partner who is working hard for a sustainable future and shares our ethos.”
Matthew Ponsonby, Head of Global Banking, BNP Paribas UK added:
“Incentivising the net zero transition through finance can be a powerful mechanism to accelerate both the corporate and investor decarbonisation trajectory. This innovative transaction in a major sector like UK transportation highlights the value of sustainable finance extending into the derivatives market, whilst also demonstrating the need to support corporates such as ABP in holistically integrating transition targets into their financing needs.”
Marina Wyatt, Chief Financial Officer, Associated British Ports, said:
“ABP recognises that it has an important role to play in helping the UK to reach net zero, and decarbonising our own operations is a vital part of this. We are proud to be partners for the first swap repack transaction with sustainability-linked key performance indicators, demonstrating our commitment to sustainability. We have reduced our absolute Greenhouse Gas Emissions by 36% since 2014, and this underlines our ambition to continuous improvement and even greater reductions in the future.”
The information and opinions contained in this document are for use by the financial press and media only. No reliance may be placed for any purpose on the information or opinions contained in this document nor should they be seen as advice.
The press release is provided on the basis that Aviva Investors Global Services Limited is not causing the communication of a financial promotion under exemption of the Financial Promotion Order, as Aviva Investors Global Services Limited has no control over the way in which an article based on this press release is prepared and published by the financial press and media.
Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (“Aviva Investors”) as at 55 May 2021. Unless stated otherwise any views, opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested.
Issued by Aviva Investors Global Services Limited, registered in England No. 1151805. Registered Office: St Helen's, 1 Undershaft, London, EC3P 3DQ Authorised and regulated by the Financial Conduct Authority.
Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £366 billion in assets as at 31 December 2020.
For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
Our vision is to earn our customers’ trust as the best place to save for the future, navigate retirement and insure what matters most to them. In 2019, we paid £33.2 billion in claims and benefits on behalf of our 33.4 million customers.
We will focus on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. Our International businesses in Europe and Asia will be managed for long-term shareholder value. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience.
Total group assets under management at Aviva group are £522 billion and our Solvency II capital surplus is £12.0 billion (HY20). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
The Aviva newsroom at www.aviva.com/newsroom includes links to our image library, research reports and our news release archive. Sign up to get the latest news from Aviva by email.
You can follow us on Twitter:
You can follow us on LinkedIn: www.linkedin.com/company/aviva-plc
For the latest corporate films from around our business, subscribe to our YouTube channel:
We have a Globelynx system for broadcast interviews. Please contact the Press Officer noted above if you would like to make a booking.