South Africa: Mediclinic refinances debt with ZAR8.45bn sustainability link

Mediclinic, the diversified international private healthcare services group, has announced that its Southern Africa division has successfully completed the refinancing of existing debt through a new ZAR8.45bn (US$570m) sustainability-linked banking facility. The syndicated sustainability-linked loan is the first of its kind arranged by a bank in Africa.

Rand Merchant Bank, a division of FirstRand Bank, acted as the lead arranger for the transaction.

The transaction sees Mediclinic Southern Africa replace an existing facility with a new ZAR7.95bn five-year senior secured debt priced initially at three-month JIBAR plus 1.54% and a ZAR500m revolving credit facility paying three-month JIBAR plus 1.60%.

Mediclinic Southern Africa will benefit from a reduced facility margin through an incentive-based pricing mechanism. The targets are directly linked to key Group environmental and social goals of progressing to becoming carbon neutral with zero waste to landfill by 2030.

“Going beyond business as usual in setting sustainability targets related to reduction in Scope 1 and 2 CO2 emissions and waste diverted from landfill, targets also included a reduction in Mediclinic’s use of water resources and improvement in patient experience,” said a representative of Mediclinic.

Mediclinic’s progress towards agreed E&S goals will be independently assessed and measured.

The specifics of the measures and the step up/down are confidential.

Refinancing of the debt facilities in Southern Africa is in line with the Mediclinic’s financial strategy and its approach to responsible leverage, according to Jurgens Myburgh, Group CFO.

“In our commitment to ensure that every day we improve sustainability by managing our resources responsibly and efficiently to the benefit of our stakeholders and the environment, this innovative mechanism allows us to align our Group financial and sustainability goals,” said Myburgh.

The other banks in the syndicate lending to Mediclinic were Standard Bank and Absa.