BASF says it has successfully issued corporate bonds with a total volume of €2.0 billion ($2.28 billion) on the capital market, including its first-ever placement of a green bond that will be used purely to finance sustainable products and projects.
The green bond placement has a term of seven years ending June 2027, a volume of €1.0 billion, and an annual coupon of 0.25%, the company says. The green bond is the first to be issued by a chemical company, a BASF spokesperson tells CW. The other tranche also had an issue volume of €1.0 billion, but with a term of three years ending June 2023 and an annual coupon of 0.101%, and will be used for general corporate financing purposes, BASF says. The company was able to secure attractive conditions “thanks to its very solid financial structure and its leading sustainability position,” it adds.
“The strong demand from investors for BASF bonds underscores the capital market’s confidence in our solid financial policies and our sustainability-driven corporate strategy,” says Hans-Ulrich Engel, BASF CFO. “The initial issue of a green bond now firmly anchors sustainability in BASF’s financing strategy as well.”
The company says it has established a framework for financing instruments based on sustainability criteria. The green finance framework will enable it to finance sustainable products or projects “offering a clear benefit to the environment and society” via green bonds on the capital market, and is fully aligned with BASF’s corporate purpose, it says.
Environment, social, and governance (ESG) principles are now a major theme in publicly-traded chemical companies’ discussions with investors. Tim Balensiefer, BASF’s investor relations manager/sustainability, told CW in March that “financial markets recognize the opportunities of sustainable business approaches and investors are increasingly interested in sustainable business management. We can see a larger group of investors becoming more attached to the ideas of ESG investment.”
By: Mark Thomas
Source: Chemical Week
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