Klabin issues 10-year sustainability-linked bond for US$ 500 million
Bond is linked to three targets in Klabin Sustainable Development Goals (KODS)
São Paulo, January 7, 2021 – Klabin has announced the issue of a bond linked to sustainability targets, called Sustainability-Linked Bond (SLB). The bond, whose value is US$ 500 million, matures in 10 years, with coupon of 3.2% p.a. In this operation, the Company undertakes to achieve three targets related to the ESG (Environmental, Social and Governance) criteria by 2025.
Of the three targets, two are directly related to industrial production – reducing the consumption of natural resources and increasing the recycling of both water and solid waste – while the third is related to biodiversity, with the focus on sustainable management and restoration of biomes. As for the target related to water, Klabin aims to reduce water consumption to 3.68 m3 per ton of product, which is equivalent to a reduction of approximately 16.7% from the baseline in 2018 and complies with SDG 6 – Clean Water and Sanitation. In case of solid waste, the Company will increase the percentage of solid waste reused and recycled to 97.5%, complying with SDG 12 – Responsible Consumption and Production. Regarding the biodiversity target, Klabin is committed to reintroducing two extinct or endangered species in the company’s forest areas, in compliance with SDG 15 – Life on Land.
Klabin’s issue was coordinated by six banks – Bank of America (BofA), Bradesco BBI, Citigroup, Itaú BBA, JP Morgan and Morgan Stanley – and highlights the Company’s recognized history of sustainable development and its capacity to generate returns for its investors. “Given our solid experience in green bonds earmarked for social and environmental projects, a bond linked to sustainable goals was a natural path for Klabin. This issue underlines how seriously we take the ESG issue and monetizes the Company’s sustainability by reducing fees. It is about creating value for all stakeholders,” says Marcos Ivo, the Chief Financial and Investor Relations Officer of Klabin.
Unlike green bonds, whose proceeds are allocated to specific social and environmental projects, the proceeds from sustainability-linked bonds can be used freely, but if the Company does not achieve the set targets, the transaction fee increases. More information about the issue is detailed in the framework available on Klabin’s Investor Relations website (link).