![]() ![]() A revolving credit facility is set up as sustainable, or converted to sustainable, by referencing its price to the sustainability-related performance of the company and, particularly, its evolution. Unlike other sustainable formats, the purpose of these lines is not to fund eco-friendly projects or investments, since these instruments are usually not set up to be drawn. In the last year many companies have arranged sustainable revolving credit lines with their relationship banks. tools that grant access to another type of business with the borrowing companies. They are eminently relationship-driven transactions for banks, i.e. When used, proceeds of this line are normally devoted to general corporate purposes. That is why 'back-up' RCFs are instruments set up not so much to draw down from them but by way of back-up line in case access to capital markets is compromised. For Investment-Grade (IG) companies, RCFs usually serve as backup instruments - a condition required by credit rating agencies to maintain their rating to issue bonds. But what does this actually entail?Ī RCF is a financing instrument that companies frequently recur to, particularly in syndicated format. Sustainable loans are one of the key tools, and banks play a decisive role when they act as sustainable agents for these loans. The financial industry is joining forces in the fight against climate change through sustainable finance. The not so remote hazards it poses to our current way of life make changes in current policies necessary. In recent years, society has become increasingly aware of the importance of climate change.
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