Hogan Lovells advises on one of Europe’s first sustainability-linked high yield bonds

London, 29 April 2021 – International law firm Hogan Lovells have advised a syndicate of banks in connection with Rexel’s new sustainability-linked notes offering; also one of the first sustainability-linked high yield bonds issued in Europe.

The Hogan Lovells team was led by High Yield partner, Sylvain Dhennin, with support from Senior Counsel and Co-Head of Impact Financing and Investing, Andrew Carey. The team advised a syndicate of banks, comprising Crédit Agricole Corporate and Investment Bank (which also acted as Sustainability-Linked Bond Structuring Advisor), HSBC and Société Générale (as Joint Global Coordinators), Barclays and Wells Fargo (as Joint Bookrunners), and  BBVA and Natixis (as Co-Lead Managers), in connection with the issuance of the €300 million unsecured sustainability-linked senior notes due 2028 by Rexel.   

Rexel, a worldwide expert in multichannel professional distribution of products and services for the energy world, published its first Sustainability-Linked Bond Framework (the “Framework”) which covers debt instruments whose financial characteristics are linked with sustainability performance targets.

Under the Framework, Rexe; selected two Key Performance Indicators and committed to achieve:

  • a 23% reduction in greenhouse gas emissions related to the consumption of products sold (part of scope 3), per thousand euro of turnover by December 31, 2023 from a 2016 baseline and
  • a 23.7% reduction in greenhouse gas emissions related to energy consumption in its operations (scopes 1 and 2) by December 31, 2023 from a 2016 baseline.

The interest rate of the Notes shall be increased by 25 basis points from 15 June 2024 if Rexel does not achieve these Sustainability Performance Targets.

Commenting, partner Sylvain Dhennin said “Our work on this matter demonstrates our ability to bring together our financing expertise and the specialist advice of our Impact Financing & Investing group to provide best-in-market support to our clients. We expect to see increased momentum behind investors engaging with financing linked to environmental and social targets going forward.”

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