LafargeHolcim successfully launches first sustainability-linked bond for EUR 850 million

LafargeHolcim today priced a EUR 850 million sustainability-linked bond with a coupon of 0.5% maturing in 2031. With this first bond of its kind in the building materials industry, the company is confirming its sustainability leadership in the sector.

Géraldine Picaud, Chief Financial Officer: “We are proud to be the first in our industry to launch a sustainability-linked bond. The order book of EUR 2.6 billion demonstrates the confidence of investors in the company’s financial strength, strategy and ability to deliver on its sustainability targets.”

Magali Anderson, Chief Sustainability Officer: “This announcement demonstrates the company’s commitment to reach the most ambitious CO2 reduction target of the industry for 2030. Today’s bond issuance brings our ESG related funding agreements to CHF 6 billion”.

Bond investors will be entitled to a higher coupon should the company not meet its objective, incentivizing LafargeHolcim to reach its target of 475 kg net CO2 per ton of cementitious material by 2030. LafargeHolcim reports on its performance against this key objective in its Sustainability Report which includes a limited assurance report by an external verifier.

ISS ESG, a leading ESG consultancy organization, gave a second-party opinion validating the robustness and relevance of the company’s CO2 reduction target in the context of this bond. ISS ESG’s experts confirmed the alignment of LafargeHolcim’s Sustainability-Linked Financing Framework with the Sustainability-Linked Bond Principles, which are published by the International Capital Markets Association (ICMA).

LafargeHolcim is rated by ISS ESG #4 out of 95 companies in the same sector (C+, Prime), qualifying its bonds as responsible investment, and #1 out of 115 companies in the construction materials industry by Sustainalytics.

The final orderbook was roughly 3.1x subscribed:

• Geographically, figures indicate that the largest shares were allocated to Germany and Austria (35%), UK & Ireland (18%) followed by Southern Europe (12%) and BeNeLux as well as France (10%) with an equally large allocation share of 10% respectively
• Asset managers represented the most important investor group, buying an overall 80% of the trade. The remainder was allocated to Insurance and Pension Funds (13%), Banks (6%) and Other (1%)