Signalling another positive step towards the development of a consistent market approach, the Loan Market Association (LMA) and the European Leveraged Finance Association (ELFA) have published a revised version of their Best Practice Guide to Sustainability-Linked Leveraged Loans. 

The revised Guide acknowledges both that the leveraged loan market is increasingly looking to engage with sustainability-linked financings, and that the sustainability-linked loan market has grown significantly since the Guide was first published in June 2021. It offers practical guidance on the application of the Sustainability-Linked Loan Principles to leveraged loans, including on the selection and disclosure of KPIs, and refers back to the LMA’s growing library of resources in this area. This includes the LMA’s model provisions for sustainability-linked loans (published in May 2023) and its up to date Sustainability Linked Loan Principles.

This revised Guide provides helpful guidance for those in the leveraged market who are perhaps newer to sustainability-linked loans, as well as those (including prospective borrowers) who are keen to see greater consensus of approach across this market. It's a significant step towards consistency across an ever-developing area. 

For more information on sustainability-linked loans and current market approaches, please contact Amy McVey or your usual Burges Salmon contact.