Norsk Hydro Enters Into US$1.6 Billion Sustainability-Linked Revolving Credit Facility

Norsk Hydro Enters Into US$1.6 Billion Sustainability-Linked Revolving Credit Facility

Norwegian aluminium giant Norsk Hydro ASA announced yesterday the signing of a new, US$1.6 billion revolving multi-currency credit facility with margins linked to the firm’s greenhouse gas emissions target.

Per the firm, the new credit facility will be used for general corporate purposes. It features a tenor of five years, with two one-year options to extend. The new credit facility replaces Hydro’s undrawn US$1.7 billion credit facility of six years ago.

The credit facility entered into by Hydro this week is part of a growing trend of corporate responsibility in sustainable practices, as it ties the facility’s margin to the firm’s progress toward its target to reduce greenhouse gas emissions by a tenth by the close of 2025.

The credit facility dovetails with Hydro’s new climate roadmap, which ultimately intends to have the firm trim greenhouse gas emissions by 30 percent below baseline by 2030.

“This is a confirmation of the strong relationship between Hydro and our core banks, and the process and terms concluded, reflect trust built over many years,” explained Executive Vice President and CFO, Pål Kildemo. “This is a good example of the close link between profitability and sustainability, and I am pleased that the bank syndicate is supporting our new climate roadmap to cut emissions by 30% by 2030.”

Bookrunners and Mandated Lead Arrangers for the credit facility were DNB Markets, a part of DNB Bank ASA, ING Belgium SA/NV, and Skandinaviska Enskilda Banken AB (publ). Also serving as Bookrunners were BNP Paribas SA Norway Branch, Crédit Agricole Corporate and Investment Bank, Danske Bank A/S, Handelsbanken Capital Markets, Svenska Handelsbanken AB (publ) and J.P. Morgan Securities plc. Citibank, N.A., Jersey Branch, Goldman Sachs Bank USA and Nordea Bank Abp also acted as Lead Arrangers for the deal. Facility Agent will be DNB, and SEB served as Sustainability Coordinator and Documentation Agent.

Norsk Hydro, which was founded in 1905, financed by the Swedish Wallenberg family and French banks, began its life named Norsk hydro-elektrisk Kvælstofaktieselskab (literally, “Norwegian hydro-electric nitrogen limited”) by Sam Eyde. The Norwegian government owns approximately 40% of the company at the present time. Norsk Hydro is one of the largest aluminium companies in the world, with plants in Rjukan, Raufoss, Vennesla, Karmøy, Høyanger, Årdal, Sunndalsøra, and Holmestrand. Norsk also has several plants abroad, including in Germany and Brazil.