The bond (ISIN XS2577874782) was issued on Friday January 13 and has an issue volume of €750m and a term until 2032. It was issued via the building materials giant's HeidelbergCement business as part of its €10bn European Medium Term Note (EMTN) programme.
The company had already announced the issue of a bond linked to sustainability criteria at its Capital Markets Day 2022.
Interest on the bond is linked to the development of specific CO2 emissions per tonne of cementitious material up to 2026 as well as 2030, which are defined as key performance indicators (KPIs) in the Sustainability-Linked Financing Framework. Compared with the base year 2021, Heidelberg Materials aims to reduce specific CO2 emissions by around 30% to 400kg per tonne of cementitious material by 2030.
“The placement reinforces our aspiration to achieve the most ambitious climate targets within the industry and to increase the share of sustainable financial instruments to over 70% by 2025,” said Heidelberg Materials CFO René Aldach. “With the denomination of €1,000, we are the only company on the capital market to date to also offer retail investors the opportunity to invest in sustainability-linked bonds."
The 4.6 times oversubscription of the bond demonstrates the confidence of the capital market in the group’s sustainability strategy. The 10-year Eurobond has a fixed interest rate of 3.75% per annum.
Joint bookrunners for the issue are BNP Paribas, Citigroup, Commerzbank, ING, SEB and Standard Chartered Bank.
Since the beginning of this year, Heidelberg Materials has also been a pioneer in the field of commercial paper (CP). The CP programme is also linked to the reduction of specific CO2 emissions per tonne of cementitious material in line with the 2026 target from the Sustainability-Linked Financing Framework.
If the company is unable to reduce CO2 emissions within the defined period and in the specified amount, a donation must be made to the non-profit organisation BirdLife Europe to promote biodiversity besides an additional annual interest payment.