DLA Piper advises on landmark sustainability-linked bond guarantee for ASEAN shipping sector

DLA Piper has assisted Credit Guarantee and Investment Facility, a trust fund of the Asian Development Bank, on the guarantee of the sustainability-linked bonds issued by Precious Shipping Public Company Limited (PSL). 

This is a landmark issuance and the first of its kind in the ASEAN shipping sector. It includes two bond tranches with maturities of five and ten years, each valued at THB 680m, totaling THB 1.36bn. The United Overseas Bank (Thai) Public Company Limited acted as the lead underwriter.

The transaction marks a significant milestone, aiming to reduce PSL’s CO2 emissions per transport work by at least 38.54% by 2034 in an effort to combat global climate change. PSL’s commitment to sustainable operations aligns with the International Maritime Organization’s objectives for environmentally responsible shipping practices.

The Asian Development Bank supported PSL in developing its Sustainability-linked Finance Framework, which aligns with the ASEAN Capital Markets Forum’s ASEAN Sustainability-linked Bond Standards and the International Capital Market Association’s Sustainability-linked Bond Principles, as verified by a Second Party Opinion from Lloyd’s Register.

The DLA Piper team was led by Waranon (Warren) Vanichprapa, Country Managing Partner for Thailand and Head of Finance in Asia; alongside Philip Lee, Head of Capital Markets, Asia Pacific and Regional Head of Financial Services in Asia, based in Singapore.

Waranon and Philip were supported by senior associate Pattadon Tejapaibul, associate Prang Prakobvaitayakij, associate, and legal assistant Nicharee Kitiyansub. Pattadon, Prang and Nicharee are all members of the Finance team and based in Bangkok. Le Jing Ong, associate in the capital markets team in Singapore also provided assistance.

Commenting on the transaction, Waranon said “DLA Piper played a pivotal role in this landmark issuance, which sets a new precedent in the ASEAN shipping sector. This transaction not only supports PSL in its sustainability goals but also aligns with our own firm's commitment of fostering environmentally responsible practices in the industry.”

Philip added “This significant issuance demonstrates the growing importance of sustainable finance. The close cooperation between our teams in Bangkok and Singapore showcases our ability to work seamlessly across borders, leveraging our global connections to provide innovative solutions for our clients.”