Swedish rolled aluminium firm Gränges AB this week announced the successful placement of SEK600 million (US$69.3 million) of sustainability-linked bonds.
The newly-issued bonds are five-year senior unsecured notes. The medium term notes are due in 2026 and feature a coupon of 3 months Stibor + 1.20 percent. Gränges says interest was much stronger than it expected, as it was oversubscribed by over SEK400 million (US$46.2 million).
Gränges’s new bonds are tied to three distinct goals, each of which is of particular importance to the firm’s sustainability push: reducing carbon emissions from its own operations and the energy it purchases by 25 percent of 2017 levels by 2025, reducing carbon emissions from sourced material inputs by 30 percent by 2025, and increasing the use of recycled aluminium by 30 percent by 2025.
Sofia Hedevåg, SVP Sustainability at Gränges, said in a related press release that the firm is pleased with the popularity of its offering.
“Gränges has a strong commitment to sustainability and it’s encouraging to see the high interest among investors in supporting our sustainability strategy and targets. The engagement confirms that our sustainability and climate strategy is relevant, ambitious, and credible.”
Danske Bank and Nordea were both involved in the issuance as joint sustainability structuring advisors and joint lead managers.
Begun in 1873 in Stockholm, Sweden as Trafik AB Grängesberg-Oxelösund, Gränges AB was resurrected in 2013 as a private company specializing in rolled aluminium heat exchangers. It employs almost 1,800 employees at the present time at two plants – one in Finspång, Sweden, that opened in its present configuration in 1972, and a second in Shanghai, China, opened in 1996. The firm boasts a total nameplate capacity of 420 thousand metric tons per annum and an annual sales total of SEK13 billion (US$1.35 billion).