LANXESS places EUR 600 million sustainability-linked benchmark bond
- Interest rate of bond linked to achievement of climate target
- LANXESS aims to reduce CO2e emissions* by 600,000 metric tons by 2025 compared to 2018
- Company aims to achieve climate neutrality by 2040
LANXESS will use the funds to finance the acquisition of the Microbial Control business from U.S.-based group IFF, which was announced in August. “With this bond, we have already fully completed the financing of the planned acquisition of IFF Microbial Control. We are pleased to see the positive response from the capital market,” said LANXESS Chief Financial Officer Michael Pontzen. “With our first sustainability-linked bond, we are underlining our commitment to sustainability also in our financing activities.” The company aims to be climate neutral by 2040.
For the issuance of sustainability-linked bonds, LANXESS has established a framework which aims to provide the necessary transparency to investors. The framework aligns with the “Sustainability Linked Bonds Principles” of the “International Capital Market Association” (ICMA). ISS ESG, a rating agency specializing in sustainability, has assessed LANXESS’ framework and considers the climate targets as relevant and ambitious. More information at Sustainable Financing (lanxess.com).
LANXESS has been active in sustainable financing already at an early stage. In December 2019, the specialty chemicals company had agreed on a sustainable revolving credit facility of EUR 1 billion with interest rates linked to the successful reduction of its CO2e emissions (Scope 1) and the increase in the proportion of women on the top three management levels.
The new bond is listed on the Luxembourg Stock Exchange in denominations of EUR 100,000. LANXESS’ issuer ratings are currently Baa2 (Moody's), BBB (Standard & Poor's) and BBB+ (Scope). A bank consortium consisting of Citi, Deutsche Bank and DZ Bank was mandated to place the bond. In addition, Deutsche Bank acted as the sustainability-linked structuring advisor.
*Scope1 and scope 2 greenhouse gas emissions
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