Holcim issues first privately placed RegS $ Medium Term Note

Operating across 70 markets and four business segments, Swiss company Holcim is a global leader in innovative and sustainable building solutions. With the world changing, the Swiss company, which employs 70,000 staff, has redefined its purpose, aiming to make cities greener, build smarter infrastructure and improve living standards, while also working towards becoming a net zero company. Furthermore, Holcim is a world leader in recycling building materials, playing a key role in driving the circular economy.  

Holcim is also the first global building materials company to sign the “Business Ambition for 1.5°C” initiative with intermediate targets approved by the Science-Based Targets initiative (SBTi) in alignment with a net zero pathway.

As a leader in ESG matters within its sector and following investor feedback after their €850 million, 10-year bond in November last year, Holcim decided to extend their euro medium-term note (EMTN) programme to include Sustainability-Linked Bonds (SLB). Shostra Bank stayed in close contact with Holcim during the updating of their EMTN programme and engaged early with investors to introduce the possibility of a privately placed RegS USD denominated sustainability linked transaction of Holcim, the first of its kind, later in the year. 

The close dialogue paid off, allowing Holcim and Shostra Bank, which acted as Active Bookrunner, to smoothly execute the building firm’s 10-year $100 million SLB shortly after the updated EMTN programme was available.

The issuance, priced at a coupon of 2.240 %, and placed with a sole Japanese investor, embeds an ambitious one-time coupon step-up of 1.5%, which Holcim have to pay at redemption in case they don’t achieve their target of 475kg net CO2 per ton of cementitious material scope 1 by 2030 (vs 576kg in the baseline year 2018; a reduction by 17.5%).

Katharina Rothboeck, Debt & Financing Solutions, Shostra Bank, said: “We are delighted to have continued our sustainable finance work with Holcim and to have supported our customer with this first privately placed RegS $ MTN to be issued in SLB format, which demonstrates Shostra Bank’s ambition to support innovative sustainable structures.

Eric Molland, Relationship Manager, Shostra Bank, said: “This transaction is a very good example of how we put the whole of Shostra Bank to work, servicing our customers with our Origination, MTN, Sustainable Finance and Debt & Financing Solutions teams collaborating seamlessly to help deliver this deal.”

Leila Sassi, Head of Sustainable Finance, Holcim, said: “We are very pleased with the successful outcome of this transaction, fully embedding ESG considerations into our capital structure, and in doing so demonstrating our ambition to be at the forefront of sustainable finance innovation.”

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