(Tiper Stock Exchange) – Pirelli today launched e successfully completed the placement at international institutional investors of its first
sustainability-linked bond for a total nominal amount of 600 million euros. The issue was placed at over 190
international investors and saw a demand equal to almost 6 times the offer, amounting to approximately 3.5 billion euros. It’s about the first Sustainability-linked issue with a size benchmark of this type placed by a company in the tire sector at a global level.
The transaction, the first carried out since Pirelli obtained the investment grade rating from S&P Global and Fitch Ratings, demonstrates the company’s commitment to integrating sustainability into its business strategy and is linked to the 2025 reduction objectives of absolute greenhouse gas emissions (Scopes 1 and 2) and of emissions from purchased raw materials (Scope 3).
The sustainability goals, validated by the Science Based Targets initiative (SBTi) as consistent with maintaining global warming “within 1.5°C”, are contained in Pirelli’s first “Sustainability-linked financing Framework”, a document containing the guidelines and the company’s commitments to its stakeholders on sustainable finance. The Framework, the first published by a company in the tire sector worldwide, was outlined in compliance with the Sustainability-Linked Bond Principles (SLBP) 2020 of the International Capital Market Association (ICMA) and the Sustainability-Linked Loan Principles 2020 published by the Loan Market Association (LMA).
“Pirelli is the first company in the world in the tire sector to launch a benchmark bond issue linked to sustainability objectives. This operation reaffirms the centrality of sustainability in our corporate strategy and Pirelli’s ability to integrate a responsible approach into all business activities to create value for all Stakeholders,” said Marco Tronchetti Provera, Executive Vice President & CEO of Pirelli.
The operation, which took place in the context of the EMTN program (Euro Medium Term Note Programme) approved by the Board of Directors on 23 February 2022, makes it possible to optimize the debt structure, extending its maturities and diversifying its sources.
The bond loan has the following characteristics: issuer: Pirelli, guarantor: Pirelli Tyre, amount: Euro 600 million, settlement date: January 18, 2023, maturity date: January 18, 2028, coupon: 4.25%, issue price: 99.704%, redemption price: 100%.
The effective yield to maturity is 4.317%, corresponding to a yield of 145 basis points above the reference rate (mid swap). The securities will be listed on the Luxembourg Stock Exchange.
(Photo: © vladimir razgulyaev / Dreamstime)