Dutch operator VodafoneZiggo has raised EUR 2.1 billion in its first debt issue under a new 'Sustainable Finance Framework'. The interest rate is linked to the company achieving the sustainability goals under its 'People Planet Progress' plan.
VodafoneZiggo targets a 50 percent reduction in its CO2 emissions by 2025, compared to 2018 levels, across Scope 1, 2 and 3. The company plans to achieve the target with the adoption of energy saving equipment and cooling systems, use of 100 percent renewable energy, and electric vehicles in its fleet.
The company's framework was evaluated by Sustainalytics and found to meet the Green Bond Principles 2021, Green Loan Principles 2021, Sustainability-Linked Bond Principles 2020 and Sustainability-Linked Loan Principles 2021. The agency termed Vodafone's targets as 'strong' and 'very ambitious' and said they should help contribute to limiting global heating to 1.5 degrees C.
The debt issue includes USD 1.525 billion of a 5.0 percent sustainability-linked senior secured note due 2032 and EUR 750 million of 3.5 percent sustainability-linked senior secured notes due 2032. The proceeds will be used for refinancing existing debt, including USD 1.6 billion of 5.5 percent notes due 2027 and EUR 620 million in 4.25 percent notes due 2027.
If VodafoneZiggo does not meet its targets, the interest rate may increase by up 0.25 percent and the company faces additional repayment costs of 0.125 percent when the debt falls due. If it does meet the targets, the costs will be reduced by the same amount if the notes are redeemed early. VodafoneZiggo said such a clause is new in the world of sustainable investment securities.
