Thanks to its extensive international network, HSBC has been supporting Classic Fashion’s sustainability journey through financing as well as the Sustainable Business Accelerator Programme, in partnership with Diginex.
In July 2022, Classic Fashion completed a US$ 85 million, 7.5-year facility to part finance its manufacturing complex, split between a US$ 25 million export finance from the UK government and a US$ 60 million commercial green loan from HSBC. This financing helped Classic Fashion develop an integrated and sustainable garment factory complex in Aqaba, Jordan to increase its production capacity. Classic Fashion aims to achieve Green Building status through gold or platinum LEED certification along with creating 4,000 additional jobs in the Aqaba plant by 2024.
HSBC was the sole structuring bank, green loan co-ordinator, mandated lead arranger (MLA), lender, and facility agent on the commercial portion of the deal.
After completing the facility, Classic Fashion continued discussions with HSBC about its sustainability initiatives and targets. Sustainability-linked loan (SLL) was suggested as part of the company’s next step in its green finance strategy.
In July 2023, Classic Fashion secured a new US$ 85 million SLL against Walmart exports from HSBC, which will help enhance sustainability of its manufacturing operations, as well as improve job opportunities for women.
“Classic Fashion has been at the forefront of the ESG transition agenda through its core activities, also looking at the overall impact of its supply chain, as well as leveraging the programmes developed by its key global clients,” says Jennifer Chammas, regional head of sustainability and sustainable finance, Commercial Banking HSBC MENAT.
“This transaction underscores the fact that HSBC is able to get to that second level, allowing us to be part of the vendor and supplier’s shift towards green manufacturing,” adds Chammas.
The facility reaffirms HSBC’s global commitment to net zero and in providing US$ 750 billion to US$ 1 trillion in sustainable financing by 2030.