International magazine LatinFinance awards CMPC for issuing the first green bond in Latin America linked to sustainability objectives
29 de January, 2024
The USD 500 million debt issuance, unveiled in June 2023, was recognized as the ESG Deal of the Year at the 2023 awards. Right now 62% of CMPC’s debt is sustainable.
In June of last year CMPC issued its first USD 500 million green and sustainability-linked bond (GSLB). The placement made the company the first issuer in all of Latin America to carry out an initiative of this type. Recently, the prestigious international magazine LatinFinance recognized the issue as the best in the sustainable debt category in its “2023 Deals of the Year Awards”. It’s a program that recognizes outstanding transactions and institutions in the capital markets of Latin America and the Caribbean.
Issued with a 10-year term, the bond was in great demand by global investors focusing on sustainability. It also reconfirmed the commitment of the Chilean multinational to a business model that effectively addresses risks related to climate change and the environment. The funds obtained with this placement will be used to finance or refinance what are known as green projects. It also links the performance of this instrument with the fulfillment of the 50% greenhouse gas emissions reduction that CMPC committed to carrying out by 2030.
CMPC CFO Fernando Hasenberg said, “This award is a very important recognition for us. It confirms that CMPC, an issuer of sustainable debt since 2017, has become a world leader in this area. This award is a result of the consistent work the company has been doing for quite some time, which is now clearly reflected in a strategy that has a very solid sustainability pillar. These financial instruments are used to transform our strategic initiatives into commitments made to investors.”
In addition to requiring that resources be invested in qualified green projects, the GSLB includes a mechanism whereby the bond coupon will increase if the company fails to meet its commitment by the scheduled date. This structure is in line with the Sustainability-Linked Bond Principles published by the International Capital Market Association (“ICMA”) and offers incentives to help the Company achieve results that are in line with its sustainability goals.
“We will certainly issue more sustainable bonds in the future. Investors are increasingly looking to invest in companies make this kind of commitment. At CMPC, we’re convinced that sustainability is of paramount importance,” explained Hasenberg, adding that 62% of the company’s debt is currently sustainable.
LatinFinance used the following criteria to award CMPC in the Corporate ESG category: the strategic importance and innovative qualities of the initiative; structural aspects of the transaction, execution, performance in the secondary market and reception by peers and investors; the geographical scope and impact in terms of ESG criteria of the project.
LatinFinance is an international magazine and platform created in 1988 in the United States that provides information on markets and economies in Latin America and the Caribbean.
