Hogan Lovells advises on Rexel's latest sustainability-linked bond issue
London, 19 September 2023 – International law firm Hogan Lovells have advised the syndicate of banks in connection with Rexel’s latest sustainability-linked bond offering.
The Hogan Lovells team was led by debt capital markets partner, Sylvain Dhennin, with support from Senior Counsel, Andrew Carey and Associate Deborah Giurgola. The team advised a syndicate of banks, comprising Crédit Agricole Corporate and Investment Bank (which also acted as Sustainability-Linked Bond Structurer), HSBC and Société Générale (as Joint Global Coordinators), Barclays, BofA Securities and Wells Fargo (as Joint Bookrunners), and Danske Bank and Standard Chartered Bank AG (as Co-Lead Managers), in connection with the issuance of the €400 million 5.250% unsecured sustainability-linked senior notes due 2030 by Rexel.Rexel is a worldwide expert in multichannel professional distribution of products and services for the energy worldaddressing three main markets: residential, commercial, and industrial. In connection with the bond offering, the company published its third Sustainability-Linked Bond Framework (the “Framework”) which covers debt instruments whose financial characteristics are linked with sustainability performance targets. A second-party opinion on the alignment of the Framework with the Sustainability-Linked Bond Principles 2023 published by the International Capital Markets Association was provided by Moody’s Investors Service.
Under the Framework, Rexel selected two Key Performance Indicators:
- A 45% reduction in greenhouse gas emissions related to the use of products sold, per euro of turnover (scope 3) by December 31, 2025 from a 2016 baseline (“Sustainability Performance Target 1”); and
- A 38% reduction in greenhouse gas emissions related to energy consumption in its operations (scopes 1 and 2) by December 31, 2025 from a 2016 baseline (“Sustainability Performance Target 2”).
These objectives are in line with Rexel’s 2030 ambition to reduce the first KPI (in intensity) by 60% and the second KPI (in absolute terms) by 60% from a 2016 baseline.
The interest rate of the Notes shall be increased by 25 basis points to 5.500% per annum from September 15, 2026, if Rexel does not achieve these Sustainability Performance Targets.
Rexel will use the proceeds of the issuance of the Notes for general corporate purposes, including the financing of the acquisition of Wasco.
Hogan Lovells has represented the syndicate banks on four consecutive bond issues by Rexel since 2019 including its first sustainability-linked bond in 2021 – then one of the first sustainability-linked high yield bonds issued in Europe.
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 Sustainable Financing and Investment group to provide best-in-market support to our clients. The transaction demonstrates the continuing momentum of thesustainable finance market as well as a welcome market appetite for a strong credit at the lower end of investment grade.”