May 27, 2021 - by Tess Virmani. Following the launch of the Sustainability Linked Loan Principles (SLLP) in March 2019, there has been a staggering increase in the volume of sustainability linked loans seen across the global syndicated loan markets. The APLMA, LMA and LSTA, together with their member committees, have therefore taken this opportunity to reflect on recent market trends and are delighted to announce the publication of a revised version of the SLLP and accompanying Guidance on Sustainability Linked Loan Principles (SLLP Guidance).

The updates principally seek to further promote the transparency and integrity of the sustainability linked loan product, by tightening the language regarding the selection of key performance indicators (KPIs) and scope of sustainability performance targets (SPTs) to provide greater clarity as to expectations for new entrants to the market.  Of particular note, the SLLP has now made the need for independent, external verification of a borrower’s performance level against each SPT for each KPI mandatory.

In addition, the SLLP have been structurally adjusted to align with ICMA’s Sustainability Linked Bond Principles, in a bid to ensure a cohesive and coherent approach to sustainability linked financial products across the debt markets. The APLMA, LMA and LSTA’s respective committees are strongly supportive of affording a borrower access to either the bond or loan markets on a refinancing, and believe the SLLP should support this aim.

All transactions completed prior to June 3, 2021 will be exempt from following the revised SLLP, and instead should be reviewed in conjunction with the SLLP published in May 2020.

For further information, please contact Tess Virmani.

The LSTA’s Sustainable Finance Library is available below:

Green Loan Principles
Guidance on GLP
Sustainability Linked Loan Principles
Guidance on SLLP
Social Loan Principles

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