Ahold Delhaize has priced an inaugural Sustainability-Linked Bond at $717 million as the company looks to finance its sustainability goals in 2021 and beyond.
The transaction follows the closing of a $1.1 billion Sustainability-Linked Revolving Credit Facility in December 2020 and the 2019 issuance of an inaugural Sustainability Bond, where the proceeds were exclusively spent on sustainability projects across Ahold Delhaize. All three reinforce the alignment of the company’s funding strategy to its commitments laid out in its Healthy & Sustainable ambition.
“I am excited to issue our first Sustainability-Linked Bond today. It helps us accelerate the achievement of the ESG targets we set in our Healthy and Sustainable roadmap and is another important step for our organization to contribute to the 1.5-degree Paris agreement,” said Frans Muller, CEO of Ahold Delhaize.
The bond pays an annual coupon of 0.375% and was issued at a price of 99.63% of the nominal value. The bond will settle on March 18, 2021 and will be listed on Euronext Amsterdam. The proceeds will be used for refinancing of debt maturities and general corporate purposes.
The bond is linked to Ahold Delhaize achieving two Sustainability Performance Targets (SPTs) by 2025:
SPT 1: Reduction of Scope 1 and 2 CO2e emissions by 29% from a 2018 baseline
SPT 2: Reduction of food waste by 32% from a 2016 baseline
The sustainability-linked feature will result in a coupon adjustment if Ahold Delhaize’s performance does not achieve one or both of the stated SPTs.
SPT 1 and 2 are aligned with Ahold Delhaize’s 2030 goals aiming to reduce Scope 1 and 2 CO2e emissions by 50% and food waste by 50%. The carbon emission goal is validated by the Science Based Targets Initiative and the food waste goal is measured according to the Food Loss and Waste Protocol.
“Sustainability-Linked Bonds represent the next phase of our ESG financing, where we bring our long-term commitments to tackle our carbon footprint and food waste directly to our investors. I am grateful for the trust our investors place in us and look forward to further partnering with them on our sustainability journey,” said Natalie Knight, CFO of Ahold Delhaize.
Ahold Delhaize USA, a division of Zaandam, Netherlands-based Ahold Delhaize, is No. 11 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in the United States.