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Suzano’s USD 750 million bond offering calls

Brazilian pulp and paper producer made a bond offering linked to sustainability

Brazilian pulp and paper producer Suzano has made a sustainability-linked bond offering of USD 750 million.

The bond offering makes Suzano the first emerging markets company incorporate the International Capital Market Association’s Sustainability-Linked Bond Principles, which provide guidelines encouraging companies to increase their environmental, social and governance (ESG) involvement.

The USD 750 million notes offered mature in 2031. The company has also made cash tender offers for outstanding guaranteed notes maturing in 2024, as well as notes due in 2025 and 2026, which were issued by subsidiaries of Suzano.

The Securities and Exchange Commission-registered bond offering, which has been made under Suzano’s Sustainability-Linked Securities Framework, has involved a banking syndicate comprising BNP Paribas Securities, Bank of America Securities, Credit Agricole Securities (USA), JP Morgan Securities, Mizuho Securities USA, Rabo Securities USA and Scotia Capital (USA).

The group of banks received legal advice from a team of Linklaters lawyers, led by partners Matthew Poulter and Gabriel Silva, alongside counsel Alejandro Gordano and two associates Emma Cano and Marcelo Lopes.

Suzano’s Sustainability-Linked Securities Framework lays out sustainability goals which include the reduction of greenhouse gas emissions, and the company’s failure to achieve the goal will increase the interest rate payable on the new bonds by 0.25%.

Last month, Suzano released its second quarter financial results, which highlighted strong growth in pulp shipments and a good exchange rate, among other things, which helped the company to achieve its best quarterly result since its combination with Brazilian pulp and paper company Fibria, last year.

In a statement at the time, Suzano’s CEO, Walter Schalka, said: “The second quarter 2020 numbers show Suzano’s capacity to generate cash flow, with successive gains in competitiveness driven by progress in the capture of synergies, even in a more challenging period.”

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