Cadwalader Advises on €400 Million Market Leading ESG CLO

June 18, 2021

Cadwalader advised Deutsche Bank as arranger of the €400 million North Westerly VII ESG CLO transaction.

The assets securing the transaction consist of a portfolio of corporate loan and bond assets managed by NIBC Bank N.V. The transaction complies with ESG (environmental, social and governance) investing best practices by requiring not only the application of ESG due diligence processes in connection with the purchase of the assets but also the ongoing monitoring of the portfolio and the activities of the underlying borrowers having regard to ESG best practices. Where it is determined that an asset in the portfolio no longer complies with certain ESG criteria, the manager is required to determine a course of action with a view to restoring such compliance, which might include consultations with the borrower or selling the asset. As part of its ESG due diligence processes, NIBC assigns ESG scores using an internal corporate and social responsibility toolkit and environmental, social and governance checklist which, from time to time, may be adapted to reflect developments in ESG best practices.

This transaction is the successor to the award-winning North Westerly VI on which Cadwalader also advised and which was the first groundbreaking ESG CLO.

The transatlantic Cadwalader team was led partner Nick Shiren and included partners Adam Blakemore, Michael Sholem, James Frazier and Jason Schwartz; special counsel Alex Collins and Catherine Richardson; and associates Melissa Byun, Matthew Lefkowitz and Cassandra Nelson-Williams.

Cadwalader is a market leader in sustainable finance, having also advised Standard Chartered as sustainability coordinator for one of the first-ever impact-focused subscription finance facilities; Greencoat UK Wind PLC on its 750 million share issuance program; Rabobank on a $500 million sustainability-linked senior secured revolving credit facility for Mercon Coffee Group; and Bank of America on a $4.1 billion ESG-Linked credit facility tied to board diversity.