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The First Sustainability Indexed Bond in the EMEA Region from Coca-Cola İçecek
11 Jan 2022Coca-Cola İçecek (CCI) combined its sustainability-oriented operating framework with its funding strategy and issued bonds at a low cost according to the country's borrowing rate reference to foreign markets. The company made Turkey's largest sustainability indexed bond issue to date, worth $500 million. CCI aims to increase water use efficiency to 13% by 2027; It aims to increase it by 17% by 2029. Coca-Cola İçecek achieved a significant success with its January 2029 maturity bond with an interest rate of 4.75 percent.
Coca-Cola İçecek (CCI) has signed the first sustainability indexed bond of the beverage industry in the Europe, Middle East and Africa (EMEA) region. As part of the borrowing carried out in this period when the risk appetite for developing countries weakened, CCI issued 500 million dollars of bonds with a maturity of 7 years at an interest rate of 4.75 percent. With this issuance, CCI has made Turkey's largest sustainability indexed bond issuance at a lower cost compared to the country's borrowing rate reference to foreign markets.
Coca-Cola Beverage CEO Burak Basarir said, "We serve more than 430 million consumers in 11 countries, including Turkey, and operate to create value for all our stakeholders. We have issued our sustainability indexed bond as the most concrete example of our sustainability focus and integrated business model. We are proud to issue the first sustainability indexed bond in both Turkey and the EMEA region of the beverage industry with the CCI bond, which has brought momentum to the Turkish market." Reminding that CCI received an investment grade "BBB-" rating by the international credit rating agencies S&P and Fitch in 2021, Basarir said, "We issued an extremely advantageous bond with our successful performance confirmed by international credit rating agencies."
34 percent of the bonds, which were the first private sector issuance to come out of the Turkish market in the last six months, were sold in the USA, 30 percent in the European Union and 16% in the United Kingdom markets. In addition to having some of the world's most important brands in its portfolio, CCI's business model focusing on corporate governance principles in high-potential countries, its strong balance sheet, the sustainability aspect of the bond, and its stable shareholding structure with Anadolu Group and The Coca-Cola Company played an important role in CCI's success.
Accepting sustainability as the basis of its business model, CCI has also demonstrated the strong connection between its financial strategy and sustainability focus areas with this bond. As a result of the meetings held with more than 75 investors before the issuance, the bond was received positively by investors. Sustainalytics, the independent ESG research, ratings and data company that provided the Second Party Opinion, evaluated the targets set out in CCI's sustainability framework document as strong. He described CCI's commitment to increase water use efficiency by 13 percent by 2027 and 17 percent by 2029, based on 2020, as ambitious.
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