R3,1bn sustainability-linked debt facility for Old Mutual

The strong and long-standing working relationship between Nedbank and Old Mutual has given rise to a number of significant milestones in the sustainable development, loan financing and bond market funding journeys of both parties. The most recent of these is the successful conclusion of a R3,125 billion sustainability-linked revolving credit facility, which represents a first of its kind for Old Mutual.

Old Mutual formally mandated Nedbank Corporate and Investment Banking (CIB) to take a leading role in structuring, coordinating and refinancing its maturing revolving credit facility (RCF) by acting in several capacities, including mandated lead arranger, co-ordinator, sustainability co-ordinator, sustainability agent, documentation agent, and publicity agent.

The resulting R3bn-plus sustainability-linked loan facility, largely developed and engineered by Nedbank CIB, in collaboration with Old Mutual, aligns with, and supports, Old Mutual’s sustainability strategy and ambitions, and delivers on an array of financial objectives for the group. These include a broader, more diversified lender group, as well as the option to extend the facility by up to one year.

Casper Troskie, Chief Financial Officer at Old Mutual, says that the new sustainability linked RCF has been designed to underpin the group’s commitment to driving sustainable development progress. It does this by linking the terms of the loan to key performance indicators that focus on two key sustainability themes, namely reducing the intensity of carbon emissions and investment into SMME businesses, which are both sustainability priorities for Old Mutual and the country.

“The carbon intensity reduction targets embedded in the RCF align with Old Mutual’s decarbonisation strategy and our commitment to climate change mitigation through our operations”, says Troskie, “and the SMME targets underpin our long-standing commitment to leveraging the power of small and medium enterprise development as an effective means of addressing poverty, inequality and unemployment in the country.”

According to Arvana Singh, Head of Sustainable Finance Solutions, as arranger, co-ordinator and majority funder under Old Mutual’s first ZAR based sustainability linked loan, Nedbank CIB was able to ensure an optimal financing outcome for Old Mutual while simultaneously progressing systems value objectives aligned with the United Nations Sustainable Development Goals. Nedbank CIB’s understanding of Old Mutual’s business and its sustainability and ESG ambitions, combined with its proven sector finance, sustainable finance and syndication expertise, were key in its ability to successfully lead arrange, fund and implement the transaction.”

“We recognise the interconnectivity between the economic, social and environmental systems we operate in, and the urgency to transform our collective growth path to one that is more socially inclusive, low carbon and resource efficient. Collaborating in this way practically enables us to transform the financial services sector to meet the changing needs of our people and planet,” concludes Troskie.


About Nedbank

Nedbank Group is one of South Africa's four largest banking groups, with Nedbank Limited as its principal banking subsidiary. The group offers a wide range of wholesale and retail banking services, including business, corporate and retail banking, commercial property finance, investment banking, private banking, foreign exchange and securities trading.

Nedbank holds leadership positions in renewable-energy finance, corporate lending, commercial property finance, retail vehicle finance, card acquiring and asset management, as well as digital product innovation. In 2019, Nedbank became the first South African commercial bank to launch a green renewable energy bond into the debt capital market. For more information. visit www.nedbank.co.za