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Lender Associations Release Sustainability Linked Loan Principles

March 25, 2019, 09:00 AM

The LMA has, together with the Loan Syndications and Trading Association and the Asia Pacific Loan Market Association, launched the Sustainability Linked Loan Principles (SLLP). The SLLP were developed by a working party, consisting of representatives from leading financial institutions active in the sustainable lending market, with the support of the International Capital Market Association who have been working on environmental and social impact metrics in relation to the Green Bond Principles.

The sustainability linked loan product is a dynamic and innovative product that enables lenders to incentivise improvements in the borrower's sustainability profile by aligning loan terms (for example, margins) to the borrower's performance against ambitious, pre-determined sustainability performance targets.

Commenting on the principles, Clare Dawson, Chief Executive of the LMA, said: "The LMA is delighted to have been a part of this ambitious global project. We hope that the release of the Sustainability Linked Loan Principles will facilitate the development of the sustainability linked loan product across global wholesale markets. The LMA will continue working with market participants and other trade bodies to encourage further growth and innovation in the sustainable and green lending markets."

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