Mashreq, a financial institution in the MENA region, has led a $3.25 billion leverage buyout sustainability-linked financing for international education company GEMS Education.
The bank served as the Lead Sustainability Coordinator, Initial Mandated Lead Arranger and Bookrunner, Account Bank, Global Agent, and Conventional Facility Agent.
The banking consortium also included other regional banks, including Dubai Islamic Bank (DIB), Abu Dhabi Commercial Bank (ADCB), and First Abu Dhabi Bank (FAB).
Sustainability-linked financing has been on the rise regionally, and last year, annual issuances of green social, sustainable, and sustainability-linked bonds (GSSB) reached a record high in the MENA.
It was shared that the facilities include key performance indicators (KPIs) to track sustainability performance targets (SPTs), centred around Sustainable Development Goals 4 and 7.
These KPIs will reportedly focus on increasing the share of renewable energy in school operations, certifying teachers in climate and environmental-related topics through the United Nations Climate Change (UNCC) program, and developing a scholarship program to ensure diversity and inclusion across schools.
GEMS has also committed to a long-term improvement plan targeting resource management and reporting.
On June 18, 2024, the local bank consortium, including Mashreq, provided underwriting and pre-funded the multi-billion dollar facility.
In partnership with Brookfield, the syndication of banks facilitated the exit of the majority position held by existing shareholders, including CVC Capital Partners, and refinanced GEMS’ existing indebtedness.
The bank facility will subsequently be syndicated in the primary loan market.
Sunny Varkey, Founder Chairman of GEMS Education, said that the collaboration enables the company to provide “high-quality, inclusive, and environmentally conscious education, ensuring we meet our long-term sustainability goals.”