Financing Innovation of the Year: Fibra Uno

Financing Innovation of the Year: Fibra Uno

The importance of environmental, social and governance covenants in the world’s financial markets is only growing. Fibra Uno, the largest real estate company in Latin America, became the first Latin company to apply ESG principles in its financing.

The revolving five-year credit facility it sold in July marked a milestone for the region. BBVA served as the sustainability agent for the $1.1 billion transaction, which used sustainability-linked loan principles, and Santander acted as the administrative agent.

“If we met the metrics for sustainability, we would get a 5 bps discount. Five basis points on $1 billion is a nice discount,” says Gonzalo Robina, the co-chief executive officer of Fibra Uno. But he insists “at the end, our commitment is not due to the discount. Our whole company is moving toward sustainability in all ways.”

The deal was split between 13.5 billion pesos ($72 million) and $410 million, Robina says.

In order to qualify for the sustainability concession, Fibra Uno needs to reduce the consumption of energy and water, and implement the use of water treatment plants at its facilities. A constant monitoring process in place, Robina says, makes sure it sticks to its promises.

While Robina discounts the chances of ever using the loan facility, the importance of having the financial resources at hand can be seen as helping the company sustain an investment grade credit rating.

Robina believes the difficult Mexican real estate market will bottom out in 2020. “Probably there is still some space to go down, but we are not far from the lowest part of the cycle.”

Award accepted by: Gonzalo Robina, Co-Chief Executive Officer

Financing Innovation of the Year

Date: July 2019

Size: US$ 1 billion

Supporting Financial Institutions: BBVA; Santander; Bank of America; Sabadell; Citibank; Goldman Sachs; HSBC; ICBC; J.P. Morgan; Scotiabank; Credit Suisse

Supporting Law Firms: Jones Day; Holland & Knight; Paul Hastings

All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email awards@latinfinance.com