Hogan Lovells Advises on Europe's First Sustainability-Linked High Yield Bond

International law firm Hogan Lovells has advised a syndicate of banks on Rexel's new sustainability-linked notes offering, marking one of the first sustainability-linked high yield bonds issued in Europe. The team, led by High Yield partner Sylvain Dhennin, worked with a syndicate of banks to issue the EU300 million unsecured sustainability-linked senior notes due 2028 by Rexel, a global leader in multichannel professional distribution of products and services for the energy world. Rexel has committed to achieving specific sustainability performance targets, including a 23% reduction in greenhouse gas emissions related to the consumption of products sold and a 23.7% reduction in greenhouse gas emissions related to energy consumption in its operations, both by December 31, 2023 from a 2016 baseline.

Key Takeaways:

• Hogan Lovells advised a syndicate of banks, including Credit Agricole Corporate and Investment Bank, HSBC, and Societe Generale, on Rexel's EU300 million unsecured sustainability-linked senior notes due 2028.
• The notes are linked to Rexel's sustainability performance targets, which include a 23% reduction in greenhouse gas emissions related to the consumption of products sold and a 23.7% reduction in greenhouse gas emissions related to energy consumption in its operations.
• Rexel's Sustainability-Linked Bond Framework covers debt instruments whose financial characteristics are linked with sustainability performance targets, with two Key Performance Indicators (KPIs) selected and committed to be achieved by December 31, 2023.
• The interest rate of the Notes shall be increased by 25 basis points from 15 June 2024 if Rexel does not achieve these Sustainability Performance Targets.
• Partner Sylvain Dhennin commented on the firm's work, saying "Our work on this matter demonstrates our ability to bring together our financing expertise and the specialist advice of our Impact Financing & Investing group to provide best-in-market support to our clients."

Statistics:

• EU300 million: The face value of the unsecured sustainability-linked senior notes due 2028 issued by Rexel.
• 23%: The target reduction in greenhouse gas emissions related to the consumption of products sold.
• 23.7%: The target reduction in greenhouse gas emissions related to energy consumption in Rexel's operations.
• December 31, 2023: The deadline for Rexel to achieve its sustainability performance targets.
• 15 June 2024: The date from which the interest rate of the Notes will be increased by 25 basis points if Rexel does not achieve its sustainability performance targets.

Sources:

• "Hogan Lovells advises on Europe's first sustainability-linked high yield bond" (Hogan Lovells press release)
• "Rexel's Sustainability-Linked Bond Framework" (Rexel website)