Ramsay Health Care is one of the largest and most diverse private healthcare companies globally, operating in 10 countries with more than eight million patient visits annually. It has a long-term commitment to sustainable business practices. Guided by a corporate philosophy of “people caring for people”, the Ramsay Cares sustainability strategy is a natural extension of its core healthcare business.
Its approach to sustainability has three pillars: people, communities, and the planet. This is a comprehensive strategy that goes beyond environmental concerns, such as reducing energy intensity and greenhouse gas emissions, to cover a broad range of sustainability issues that impact the company including the wellbeing of its staff.
When Ramsay started to review its capital structure in 2020, with the aim of refinancing its USD3 billion debt book, it turned to HSBC for a solution that not only met its financing needs, but also aligned with its sustainability goals.
HSBC was mandated as the sole credit rating, capital structuring and sustainable finance advisor. HSBC’s universal footprint and holistic approach across loans, capital markets, sustainable finance and credit ratings analysis enabled us to provide strong advice to Ramsay to help optimise its debt platform and support their future growth aspirations.
“At HSBC, we believe in banking and supporting clients like Ramsay that have positive impacts on the environment and society, thereby helping contribute to a more sustainable future,” said Michael Rossiter, Head of Leveraged, Acquisition and Syndicated Finance, HSBC Australia.
Oversubscribed, with new lenders
The resulting AUD1.5 billion sustainable-linked-loan (SLL) was a first for the healthcare industry in Asia, and at the time of completion it was also the largest corporate syndicated SLL in Australia.
In addition to the inaugural BBB global credit rating from Fitch, which helped attract a significant number of new lenders, a key part of the loan’s overall success was attaching the ambitious environmental, social and governance (ESG) performance indicators, enabling Ramsay to tap into the significant demand for SLL credit. Participating banks were from Australia, Asia, Europe and North America.
“Despite some of the challenges presented to the healthcare sector by the COVID-19 pandemic, Ramsay’s sound underlying credit profile together with its highly credible Ramsay Cares sustainability strategy ensured the success of this landmark transaction that was well received by all lenders,” said Mr Rossiter.
“A strong investment grade credit rating alongside the attractiveness of the SLL combined to ensure that not only was the loan materially oversubscribed, but there were over 30 existing and new lenders committing to the transaction,” he said.
Linked to ESG success
The SLL’s interest rate is connected to Ramsay’s performance across ESG measures. Its innovative structure, and diversifying of funding sources, is representative of HSBC’s industry-leading approach to sustainable finance.
In 2021, Ramsay’s SLL was awarded the Syndicated Green/Sustainable Deal of the Year, and HSBC as Green and Sustainability Loan Advisor of the Year in the Asia Pacific Loan Market Association (ALPMA) awards. The loan was also named ESG Loan of the Year by the highly regarded International Financing (IFR) Asia magazine while HSBC was chosen as Australia/New Zealand Loan House of the Year.
Ramsay is now able to better realise its sustainability goals – caring for people, the planet, and communities. A standout of the people pillar is an initiative to protect the mental health of its staff. Healthcare workers have faced extraordinary pressure during the pandemic, highlighting the need to maintain their psychological wellbeing. To realise this goal, Ramsay Australia and Ramsay UK have set a target to train 3 per cent of its staff to become mental health first aiders by 2026.
“The loan helps us embed our sustainability targets which reflects that our people, patients and reducing our environmental footprint, are essential to our business success,” said Martyn Roberts, Group Chief Financial Officer, Ramsay Health Care.
ESG gains in the healthcare industry can make a real difference to the broader Australian economy. It accounts for 10 per cent of GDP, is the country’s largest employer*, and creates 7 per cent of its CO2 emissions#.
Leading the drive to sustainability
Ramsay’s SLL demonstrates HSBC’s ability to provide comprehensive financing structuring and execution support for its clients. The strong reception of the loan shows that there is strong demand for sustainability-linked products, while borrowers benefit from the alignment of their financing and ESG goals. Taken together, it is a powerful combination.
To find out more, speak to your HSBC Relationship Manager.
*Melbourne Institute, Health and Healthcare