The success of MINT’s landmark ESG financing in Thailand in mid-2024 showed the significance and future potential of sustainability-linked transactions for Asia’s capital markets.
This THB8 billion ($237 million) issuance of debentures comprised a THB 5 billion sustainability-linked bond (SLB) and THB 3 billion conventional bond. It was a milestone in ESG financing domestically and for the region – the first of its kind within Thailand’s hospitality sector, as well as Asia’s first SLB for a company in this industry.
Investors certainly responded favourably, with strong participation from high-quality accounts despite lingering volatility in global markets resulting in an oversubscription of over seven times the initial target issue size.
At the same time, MINT was able to reinforce through this transaction the importance it places on making a meaningful impact.
“The overwhelming investor demand together with MINT’s robust credit profile enabled us to secure funding at very competitive rates for refinancing outstanding debt, thereby bringing down the company’s overall funding cost,” explained Chaiyapat Paitoon, chief financial officer. “The SLB also reiterated our long-standing commitment to embracing sustainability practices.”
Giving investors what they want
In general, SLB issuance is projected to grow in 2025, with Moody’s Ratings forecasting a 14% increase this year to $35 billion.
MINT has already seen how strong investor appetite can be. Its overall offer garnered robust demand of more than THB 36 billion from more than 80 institutional and cooperative investors, surpassing the initial target issue size of THB 5 billion and representing 7.3 times oversubscription.
Such participation also reflected confidence in MINT’s performance after its rapid post-pandemic recovery, plus the company’s commitment to sustainability initiatives. As a result, MINT took the opportunity to exercise a THB3 billion Greenshoe Option, bringing the total transaction up to THB 8 billion.
“This refinancing transaction aligns with our plan to improve our financial metrics and optimise our financial leverage level,” added Chaiyapat Paitoon at MINT.
Putting sustainability at the core
The transaction also played a key part in sharpening and deepening MINT’s focus on sustainability as integral to its business strategy.
The issuance involved drafting a sustainability-linked financing framework and obtaining a second party opinion from Sustainalytics to ensure alignment with international guidelines and standards.
Ultimately, the company’s Sustainability Performance Targets (SPTs), associated with SLBs, encompass the following:
• KPI 1: Scope 1 and 2 GHG emissions intensity of Minor Hotels (tCO2e per room sold)
• SPT1: Reduce Scope 1 and 2 GHG emissions intensity to 0.018 tCO2e per room sold by FY 2026 from a FY2019 baseline of 0.023 tCO2e per room sold
• KPI 2: Water withdrawal intensity of Minor Hotels (m3 per room sold)
• SPT2: Reduce water withdrawal intensity to 0.68 m3 per room sold by FY2025 from a FY 2022 baseline of 0.75 m3 per room sold
The KPIs target the GHG emissions intensity and water withdrawal intensity of Minor Hotels, which represent a large majority of Minor's overall emissions and water withdrawals, and is also the largest contributor to Minor's revenue.
Yet MINT’s unwavering commitment to sustainability and responsible practices is not just a corporate responsibility; it's a moral obligation, explained Dillip Rajakarier, group chief executive officer (CEO) and CEO of Minor Hotels.
He added that the issuance “serves as a reaffirmation of our dedication to make positive changes, not only within our operations, but hopefully throughout the entire industry.”
To help achieve this, the company prioritises the creation of shared value to benefit everyone through its sustainability efforts.
“Our commitment is demonstrated through our ambitious net zero targets, extensive community engagement programmes across our operating regions, and dedicated conservation initiatives to protect biodiversity in sensitive ecosystems,” said Chompan Kulnides, chief sustainability officer of MINT.
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