Mondi raises ESG-linked debt


Mondi raises ESG-linked debt


Published Date: 2021-06-07 | Source: INCE|Community | Author: The Finance Ghost

Mondi raises ESG-linked debt

In case it wasn't already obvious, I love finance and banking. The structuring opportunities are endless and the world is full of smart people thinking of new ways to put financial products together.

Mondi Plc has signed a €750 million revolving credit facility. The interesting thing about this debt is that the cost will vary based on Mondi achieving certain goals linked to its 2030 sustainable development goals.

This follows a similar ethos to the types of funding you see going into social enterprises, a topic I've written on before.

This is a 5-year facility with the option to extend by one or two years with approval from each of the banks. There are ten banks involved here, so such an approval is anything but a slam dunk.

Mondi has aligned with the UN Sustainable Development goals and is focused on three areas: circular-driven packaging and paper solutions, empowered people and climate change. The company hasn't disclosed the specific targets against which the cost of the debt will be measured, but they will naturally be in line with these areas.

This is a perfect example of alignment between ESG metrics and funding. Companies want to do the right thing and financial support is often the catalyst for that action to be taken.

This news came at the end of a busy week for Mondi, during which the company also confirmed that it has completed its acquisition of 90.38% of the shares in Olmuksan International Paper Ambalaj Sanayi ve Ticaret A.S., a name which would've given the Mondi investor relations team many nightmares in preparing for media interviews.

Olmuksan is listed on the Istanbul stock market and operates in the Turkish corrugated market, which Mondi has identified as a fast-growing opportunity. The other 9.62% will be acquired under a mandatory tender offer.


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