In brief: Apollo’s OLB ties loan costs to ESG

Oldenburgische Landesbank (OLB), a German bank owned by Apollo Global Management, has linked the margin ratchet of a €24.5 million loan to climate and social targets. The loan was issued to private equity firm Bluegem’s portfolio company, Dr. Vranjes, a home fragrances company.

This is Bluegem’s first sustainability-linked loan, and it is planning to complete two more sustainability-linked loans for portfolio companies in the next six months, New Private Markets understands. The firm is raising its third private equity fund with a €400 million target, according to affiliate title Private Equity International’s database.

The margin ratchet is linked to Dr. Vranjes’ performance against two KPIs: increasing women at management level to 40 percent, and increasing the company’s use of recyclable plastic packaging. Apollo acquired a 90 percent stake in OLB from Allianz for €300 million in 2017, Reuters reported.