Singapore's Quadria secures $200m 'social' credit facility
Singapore-based healthcare specialist Quadria Capital has secured a revolving credit facility of up to USD 200m for investments deemed “social projects.”
The structure of the facility is in accordance with the social loan principles, a lending industry guideline for loans linked to social outcomes. Quadria expects this to include future investments related to improving access to healthcare, pharmaceuticals, and diagnostic assets in South and Southeast Asia.
HSBC Singapore and ING Singapore were the original lenders for the facility; it marks HSBC’s first social loan for a private equity firm in Southeast Asia. HSBC acted as the facility and security agent, while ING acted as the sole social coordinator. ING was also involved in the publication and review process for the social loan principles in 2021.
Quadria said the facility would allow it to make investments more efficiently. The firm recently used USD 77m from the facility for its USD 155m investment in India’s Maxivision Eye Hospital. The deal met the loan criterion in that Maxivision improves access to affordable eye care in underserved cities and rural areas.
“With this social loan, the first of its kind in Asia, we are bringing to the region financial innovations designed to channel capital into projects that create broad social impact,” Abrar Mir, co-founder and managing partner at Quadria, said in a statement.
“It demonstrates our ability to avail ourselves of sustainability-linked financing to expand quality and accessible healthcare services across the region while generating attractive returns.”
The loan marks a refinement of a recent trend in sustainability-linked credit facilities. It reflects several industry themes, including pressure from LPs around environmental, social, and governance (ESG) compliance, stakeholder activism, and increasing interest in impact investing.
“Between 20-40% of all fund financings we are working on now have ESG criteria, up from 5-10% a few years ago, although the detail and rigour of these metrics vary substantially,” Soumitro Mukerji, a partner at Mayer Brown in Singapore told AVCJ last October, flagging challenges around auditing ESG outcomes and greenwashing.
“I expect ESG-linked lending to only grow; the question is whether it grows gradually or exponentially.”
Quadria became the first Asian GP to secure a portfolio-level sustainability-linked loan in 2019 when ING provided a USD 65m revolving capital call facility.
In this instance, performance metrics were drawn from eight healthcare-related ESG matrixes that are tracked by Quadria. These ranged from energy usage to ethics and anti-corruption to accessibility for underserved groups.
Quadria is currently raising its third flagship fund with a target of USD 880m. The vehicle was launched last year with a view to raising as much as USD 1bn. The firm typcially writes cheques in the USD 70m to USD 200m range.
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