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In this edition of In the Know, we look at Environmental, Social and Governance (ESG) standards in Sustainability Linked Lending (in both loans and bonds). We address the ESG margin ratchet, how it interacts with ESG targets and testing strategies, and potential reinvestment obligations arising out of those interest savings, in each case, within the European leveraged finance market.

In particular we look at:

  • The ESG margin ratchet and what it involves
  • Application, testing frequency and pricing
  • Measuring ESG performance
  • Sustainability performance targets and key performance indicators
  • ESG ratings
  • Ratchet application
  • Reinvestment obligations





Ben Wilkinson is a partner in Baker McKenzie's Banking and Finance Practice in London. Ben's experience includes advising investment banks and private credit funds in relation to cross-border acquisition finance transactions, in particular those with complex capital structures. Ben regularly advises lenders, borrowers and financial advisors in connection with the debt financing of acquisitions of public companies. Ben also acts for a variety of lender syndicates, steering committees, sponsors and companies in relation to various restructuring matters.


Nick is a partner in the banking and finance team of Baker McKenzie. Nick is based in London and his experience includes a secondment to the Blackstone Group and to the Hong Kong office of his previous firm.


Connor's areas of practice include acquisition finance and general corporate banking. He acts on behalf of lenders and borrowers, corporates and private equity houses, advising on both bilateral and club lending transactions, for private equity backed acquisitions and management buy-outs. Connor has spent time on secondment at Investec Bank plc’s leveraged finance desk. Prior to joining Baker McKenzie, Connor worked at a leading Scottish law firm.


Benjamin is a New York qualified senior associate in the Firm’s Corporate Finance group in London. Prior to joining the Firm in 2019, he worked in a leading US law firm in London. Benjamin has experience advising banks, private clients and borrowers on a wide range of corporate finance transactions, including high yield debt offerings, liability management transactions, syndicated credit facilities and restructuring transactions. Benjamin has also worked on secondment at a leading global investment bank its leveraged finance legal team.

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