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The global sportswear manufacturer announced it has successfully placed its first sustainability bond as it continues to execute on its ambitious long-term sustainability roadmap while at the same time further optimising its capital structure and financing costs.
To be listed on the Luxembourg Stock Exchange, Adidas’ €500 million bond has a term of eight years, a coupon of 0.00%, and denominations of €100,000 each. The offering was more than five times oversubscribed, according to the sportswear manufacturer. Harm Ohlmeyer, CFO, Adidas, said “the proceeds will help fund environmental as well as social initiatives at Adidas, as we are committed to keep building on our industry leadership in the area of sustainability”. Proceeds from the offering are to be used in accordance with Adidas’ newly created sustainability bond framework, which has been validated by a second-party opinion from Sustainalytics, an independent provider of sustainability ratings.
“Eligible sustainable projects cover investments into more sustainable materials and processes as well as projects that positively impact communities. More specifically, this includes purchases of recycled materials for sustainably sourced products, investments into renewable energy production and energy-efficient buildings as well as various initiatives to create lasting change for underrepresented communities”, said Adidas, adding that it has taken important steps toward optimising its capital structure and financing costs in the recent past.
In early August, the company received strong first-time investment-grade ratings by both S&P and Moody’s. While Standard & Poor’s rated Adidas ‘A+’, Moody’s granted the company an ‘A2’ rating. The outlook for both ratings is ‘stable’. In the beginning of September, Adidas successfully placed two bonds in an amount of €1 billion in total. The bonds of €500 million each have maturities of four and 15 years and coupons of 0.00% and 0.625%, respectively. “In context of today’s sustainability bond issuance, the syndicated revolving loan facility under participation of KfW will be further reduced by €500 million to €2.1 billion” said Adidas, which secured the facility earlier this year to bridge the unprecedented situation caused by the global coronavirus pandemic.