Flender financing to set ESG precedent for lagging levfin market

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By Owen Sanderson
20 Jan 2021

Financing for Carlyle’s purchase of Flender, a turbine gearbox manufacturer, could set a precedent for leveraged finance, which has lagged behind other debt markets in adopting instruments linked to environmental, social and governance conditions. Other issuers are sure to follow, but the market may have to solve other challenges before this can become a market standard.

The €1.04bn term loan B includes a possible 10bp margin adjustment, linked to Flender hitting ESG goals. Structures like this have become common in investment grade loans, but are only present on a handful of European leveraged deals, and none at all in the US.

“We expect ESG-linked ...

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