Commonwealth Bank launches 1st social loan

Social loans are a type of use-of-proceeds sustainable finance product used to support projects and activities that address a social issue or achieve positive social outcomes for certain populations, particularly underserved, marginalised and vulnerable groups.

APM’s social loan is aligned with the Asia Pacific Loan Market Association (APLMA)’s Social Loan Principles, under APLMA’s criteria covering employment generation, access to essential services (health and healthcare), and socio-economic advancement and empowerment. The net proceeds from the social loan will be used to finance or refinance funds related to delivering social services by APM to a range of target populations including those with disabilities, the unemployed and vulnerable groups.

APM gained the first social-labelled corporate debt facility in Australia by demonstrating that its provision of employment services, health and wellbeing services, disability and aged care support services, and community and assessment services, clearly aligns with social projects supporting a range of target populations.

CBA acted as sole social loan coordinator and was a key lender to the syndicated $840 million social loan facility. Skye Capital acted as debt adviser to the transaction and a second party opinion was provided by DNV.

Michael Thorpe, managing director, future cities and networks at Commonwealth Bank, said APM’s key business focus is to deliver social good.

“We’re delighted to have worked with APM to develop an innovative sustainable finance solution to help recognise the important social contribution APM makes to communities in Australia and internationally,” he said.

Charles Davis, managing director, sustainable finance and ESG at CBA said the bank’s sustainable finance capabilities help clients promote their ESG credentials to broader stakeholders and get recognition for the important social impact work they undertake.

“APM’s social loan marks a significant step in the development of Australia’s sustainable finance market, opening a new avenue for institutions to promote their social credentials. This is another example of how the sustainable finance market is becoming more holistic, and expanding beyond the green and environmental focus to recognise social contributions by issuers,” Mr Davis said.