39% of Suzano’s debt linked to social and environmental commitments
Suzano, the world's leading eucalyptus pulp and paper producer and a global benchmark in the manufacture of bioproducts developed from eucalyptus, announces the completion of a new seven-year (2028) US$500 million Sustainability-Linked Bond (SLB) linked to social and environmental targets. The capital raising received high levels of investor interest, attracting USD 3.4bn in demand - 6.8x oversubscribed.
The targets have clear links to Suzano’s Environmental, Social and Governance commitments around diversity & inclusion (D&I), as well as its continued focus on conservation and promoting biodiversity.
Specifically, Suzano is dedicated to:
- Increasing the representative of women in leadership positions in the Company to 30% by the end of 2025 (16% of women were in leadership positions in 2019), and
- Decreasing the intensity of water captured in industrial operations by 12.4% to 26.1 m3/ton produced or less by the end of 2026 (from 29.8 m³/t in 2018).
Julio Ramundo, Director of Corporate Finance at Suzano, commented: “We are delighted with the outcome of this new issuance. Once again, we received high investor demand, driven by ongoing investor appetite for climate-conscious capital opportunities. That has translated into reduced cost of capital for Suzano as the 2028 transaction resulted in the lowest yield for a Brazilian corporation for the seven-year term.
“ESG practices have been an inherent part of Suzano's DNA and daily operations for many years. This latest transaction underlines Suzano’s commitment to making its capital structure as responsible and sustainable as possible. 39% of Suzano’s debt is now issued through Sustainability Linked Bonds or other green finance products compared to 9% two years ago.
“That said, Suzano recognizes that its ESG journey is far from complete and is committed to continuously reviewing and advancing its position and levels of transparency, which is driven by having clear goals”.
This new seven-year (2028) bond follows the completion of a US$1 billion Sustainability-Linked Bond; it makes use of similar targets as the ten-year transaction completed in June 2021 which received high investor demand at >4.5x the initial planned issuance of US$750 million. The bond was the first SLB of its kind in Latin America that includes a D&I target, with bondholders entitled to receive a higher amount of interest if Suzano fails to meet its targets.
Since 2020, Suzano has raised approximately US$2.75 billion in Sustainability Linked Bonds, making Suzano one of the leading corporations in this field. In September 2020, Suzano became only the second company globally to link its public commitments on ESG to the company's debt management by launching its first Sustainability-Linked Bond. This was the first by any Latin American company and in the pulp and paper sector. The bond is linked to the goal of reducing greenhouse gas emissions by 15% by 2030 and raised a total of US$1.25 billion in the international market (US$750 million in September 2020 and a further US$500 million in November 2020).
These capital raisings underline Suzano’s leading position as an agent of change in the combined development of innovative and sustainable solutions contributing to tackle society’s greatest challenges through its business. In addition, this transaction highlights Suzano’s commitment to making its capital structure as sustainable and green as possible. After this issuance, 39% of Suzano’s debt is issued through Sustainability Linked Bonds or other green finance products compared to 9% at the end of 2019.
The two Sustainability-Linked Bond goals are part of Suzano’s 14 long-term public goals, called the ‘Commitment to Renew Life’. These goals can be viewed at: https://centraldeindicadores.suzano.com.br/en/long-term-goals2/