Dairy company FrieslandCampina has priced and upsized its green Schuldschein, raising €300 million ($341 million).
The Schuldschein – a type of privately-placed German debt similar to a mid-term note – was issued in four tranches:
- five year, fixed, 0.93% for €48.5 million;
- seven year, fixed, 1.39% for €176.5 million;
- 8.5 year, fixed, 1.71% for €30 million;
- 10 year, fixed, 2% for €45 million.
Proceeds from the Schuldschein will be used in eligible projects under FrieslandCampina's green bond framework, which is line with the Global Dairy Agenda for Action's Dairy Sustainability Framework.
The framework's eligible projects include reduction of the "environmental footprint" of factories, to which 80-90% of the bond's proceeds will be allocated, sustainable farmer development programmes in developing markets (5-10%), and "development of healthier products" (5-10%).
"The environmental footprint portion is dominant, which has always been our plan. That's also the main reason for calling it green instead of sustainable," said Klass Springer, director of corporate treasury at FrieslandCampina.
Vigeo Eiris provided a second opinion on the sustainability of the framework and scored its environmental impact as "robust", the second best score under its rating criteria.
Hans Biemans, head of sustainability at Rabobank – green structuring advisor for the bond - said it was a "landmark deal", pointing out that this is the first dairy company to issue a green bond.
Friesland has said that 75% of the bond proceeds will be used to refinance existing projects.
The company has also committed to third-party annual assurance of its use of proceeds, by an auditor, and the publication of an investor-dedicated annual report.
Bayerische Landesbank, BNP Paribas, ING Bank, Rabobank in cooperation with Raiffeisen Bank International and UniCredit were bookrunners for the deal.
Other issuers tapping the market recently with green Schuldscheins include wind turbine manufacturer Nordex, which issued a €550 million bond last week, and Dutch grid company TenneT, which launched a €300 million offering last week.