BMO Works with Leading Containership Leasing Company Seaspan Corporation to Align Financing to Decarbonization Goals

Rhea-AI Summary

BMO Financial Group (TSX: BMO) has secured a US$250 million Sustainability-Linked Revolving Credit Facility with Seaspan, a leading containership leasing company. This financing deal ties interest rates to Seaspan's carbon intensity alignment with the International Maritime Organization's 2050 decarbonization goals. It reflects BMO's commitment to sustainable finance, marking its 14th Sustainability Linked Loan in the past year. BMO aims to deploy $300 billion in sustainable lending by 2025, supporting clients in their transition to a net-zero economy.

Positive

• Secured a US$250 million Sustainability-Linked Revolving Credit Facility with Seaspan, enhancing financial terms tied to carbon intensity reductions.
• BMO's leadership in structuring sustainable loans, being the leading Canadian bank in this sector.
• Focus on sustainability aligns with broader financial goals, enhancing BMO's brand reputation.

Negative

• None.

• Loan tied to the alignment of the carbon intensity of Seaspan's vessels with the International Maritime Organization's 2050 decarbonization trajectory
• BMO is committed to being its clients' lead partner in their transition to a net-zero world – 14^th Sustainability Linked Loan structured by BMO in the past 12 months

TORONTO, Feb. 17, 2022 /PRNewswire/ - BMO Financial Group (TSX:BMO) (NYSE:BMO), acting as lead sustainability structuring coordinator in a syndicate of Canadian, U.S. and European banks, has announced a financing deal with Seaspan, a leading containership leasing company. An amendment to an existing credit facility, the deal introduces a margin adjustment incentive mechanism tied to the alignment of the carbon intensity of Seaspan's vessels with the International Maritime Organization's 2050 decarbonization trajectory. The deal also incorporates sustainability-linked provisions into charter contracts, creating a value chain approach to decarbonization.

Matt Borys, Head of Capital Markets & Treasurer of Seaspan commented, "As the leader in the industry, we feel it is Seaspan's duty, while also in alignment with our strategic objectives, to be at the forefront of environmental sustainability initiatives. Seaspan has a long history in this regard and have been designing and building vessels with industry leading fuel efficiency for over ten years. This innovative SLL structure created in partnership with BMO allows Seaspan to go beyond technology. We have set ambitious targets aimed at aligning our environmental performance with our financial objectives as well as those of our customers, creating a true supply chain approach to decarbonization."

"As sustainable lending continues to grow around the world, BMO is proud to be the leading Canadian bank for SLL structuring. Helping clients like Seaspan reach their ESG goals is an important way BMO is Boldly Growing the Good in business and life, and a great example of the progress our clients across industries can make as we work together to build a more sustainable future," said Jonathan Hackett, Head, Sustainable Finance, BMO Capital Markets.

Sustainability-linked revolving credit facility

The Sustainability-Linked 3-Year, US$250 million Revolving Credit Facility includes terms that reduce or increase the borrowing costs as targets related to carbon intensity of vessels and sustainability-linked contracts with charterers are met or missed. BMO Capital Markets and Citigroup Global Markets are mandated lead arrangers and bookrunners, with BMO Capital Markets acting as Co-Sustainability Coordinator.

A recognized sustainability leader

Carbon neutral in its own operations since 2010, BMO announced its Climate Ambition in March 2021 with a commitment to deploy $300 billion in sustainable lending and underwriting to companies pursuing sustainable outcomes by 2025.  BMO is focused on being its clients' lead partner in their transition to a net zero world and, since December 2019, has completed green and sustainability-linked loans for companies in a range of sectors, with targets including sustainability, diversity, and health and safety. To support clients' pursuit of opportunities driven by the increasing momentum of the global economy's shift in production and consumption of energy, in 2021 BMO established a dedicated Energy Transition Group and the BMO Climate Institute.

BMO's leadership on sustainability has been recognized on a number of rankings, including the Wall Street Journal's 100 Most Sustainably Managed Companies in the World, Corporate Knights' Global 100 Most Sustainable Corporations, Dow Jones Sustainability Indices World Index, and Ethisphere Institute's list of the World's Most Ethical Companies.

For more information on BMO's commitment to a sustainable future, please visit the bank's Sustainability Report. To learn more about sustainable finance at BMO click here. For BMO's climate ambition, visit its Climate page.

About BMO Financial Group 
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $988 billion as of October 31, 2021, and a team of diverse and highly engaged employees, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets.

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SOURCE BMO Financial Group

FAQ

What is the significance of BMO's US$250 million loan to Seaspan?

The loan aligns with Seaspan's carbon intensity goals and the International Maritime Organization's 2050 decarbonization targets, potentially affecting Seaspan's operational costs and sustainability initiatives.

How does BMO support sustainability initiatives through financing?

BMO has committed to deploying $300 billion in sustainable lending by 2025 and has structured multiple sustainability-linked loans, partnering with companies like Seaspan to facilitate their environmental goals.

What is the role of the Sustainability-Linked Revolving Credit Facility?

This facility allows Seaspan to adjust borrowing costs based on their carbon intensity performance, incentivizing sustainability in their operations.

How many sustainability-linked loans has BMO structured recently?

BMO has structured 14 sustainability-linked loans in the past year, demonstrating its commitment to sustainable finance.