EQT has signed a €2.7bn bridge facility with a maximum limit of €5bn.
"This new bridge facility demonstrates how private equity can play an instrumental role as a catalyst of change,” said Therése Lennehag, head of sustainability at EQT. “Moving the entire financial community to stimulate more sustainable businesses.”
The new subscription credit facility (SCF) will go to infrastructure businesses in EQT’s portfolio. The last facility, which signed at €2.3bn with a maximum limit of €5bn in June, was earmarked for EQT’s private equity business line.
“Clearly ESG is becoming a priority to private equity,” said a syndicate banker based in London. “It’s a big part of the market that remains mostly uninvolved in ESG [finance] at the moment.”
The banker added: “I can see more PE firms exploring this in 2021, especially once we start moving out of Covid.”
BNP Paribas and SEB reprised their role of sustainability coordinators on the new deal for EQT.
The margin on the SCF is linked to EQT’s portfolio companies improving performance in the areas of gender equality on boards, renewable energy transition and a fundamental sustainability governance platform.
If EQT hits the metrics under the SCF, it will see female board representation increase to 50% and the use of renewable electricity to 85%.
SCFs use as collateral the unfunded commitments of a fund’s investors rather than the fund’s underlying investment assets.