Lara Rios, Holland & Knight. Courtesy photo

International Transactions

LARA RIOS

Holland & Knight

The law firm has been working with Fibra UNO, Mexico's first and largest real estate investment trust, since it went public on Mexico's stock exchange in 2011.

The company's culture prioritizes sustainability and green practices. Fibra UNO wanted to combine a financing deal and its environmental philosophy by securing a sustainability-linked loan — the pricing reduces borrowing costs if annual measurable benchmarks set by the borrower are met.

Senior counsel Lara Rios, who specializes in cross-border syndicated loans and green lending, worked with the company and lenders to create the first-of-its-kind deal in Latin America tying a $1 billion revolving credit facility to lower energy consumption at its properties. The audited numbers already are reported to shareholders.

The green component holds the borrower accountable, and lenders can offer an innovative product that furthers their own social responsibility goals.

Describe a key piece of testimony, evidence, ruling or order in your case and how it influenced the outcome: We advised Fibra UNO on the dual currency (U.S. dollars and Mexican pesos), five-year revolving credit agreement.

The unsecured facility incorporates a sustainability-linked pricing grid that reduces the borrowing spread if certain benchmarks are achieved each year. The syndicated facility complies with the Loan Syndications and Trading Association's Sustainability Linked Loan Principles published in March.

This transaction was not only a first for our client, but the first of its kind for a borrower in Latin America.

To get this transaction closed, we had to work very closely with our client and the banks to ensure that the technical terms of the deal fit the client's sustainability vision. A key factor in the transaction was our client's track record of sustainable practices, goals and reporting.

This made it easier for the parties to align in order to structure a transaction that had meaningful sustainability targets that the market would support. I hope that this transaction can serve as a model and precedent for more sustainability-linked lending in Latin America in the future.