ICG successfully negotiates a new £550m ESG-linked Revolving Credit Facility

ICG recently negotiated its first £550m Sustainability-linked Revolving Credit Facility to replace the existing facilities.

This was seen as an important refinancing for ICG, to increase ICG’s financial position over the long term to support our growth objectives and align with our ESG ambitions, particularly around climate change.

In summary, our objectives were as follows:

  • Increase ICG’s long term liquidity profile
  • Ensure ICG has the right participating global Bank Group that is fit for purpose for ICG’s future growth ambitions
  • Negotiate the introduction of ESG (climate-related) metrics linked to the margin adjustment, consistent with our corporate strategy
  • Include LIBOR transition language

The end result “…exceeded expectations”, said a delighted Steve Burton, Head of Treasury.

We had a great response, with a large oversubscription by a syndicate of leading global banks, who we managed to scale back, even though we upsized our initial £500m ask to £550m. The outcome provides us with a substantial liquidity cushion for the coming years – it’s a 3 year facility with two extension options – and shows the incredible support the banking community has for ICG.

The biggest change was with regard to ESG, with adjustments to the margin linked to achieving specific climate-related metrics, related to reducing our operational emissions and integrating climate risk into our investment analysis. Eimear Palmer, Responsible Investing Officer, was heavily involved in the whole process, noting:

This is an important milestone in ICG’s ESG journey and underscores ICG’s commitment to sustainability, as we align our corporate financing structure with our ESG priorities for the first time. It was critical to have such climate-related metrics, in such a key transaction, to drive positive real world outcomes and contribute to a more sustainable climate-resilient economy.

The syndicate banks were strongly supportive.

The new facility also incorporates LIBOR “rate switch” mechanics for Sterling and US Dollars, in order to cater for LIBOR transition. Interest on the revolving facility loans will reference LIBOR for Sterling and US Dollar loans until the facility agreement’s trigger mechanism switches the reference rate from LIBOR to compounded SONIA for Sterling loans and from LIBOR to compounded SOFR for US Dollar loans.