Bangkok-headquartered global chemical company Indorama Ventures has today issued a THB 10 billion (US$ 300 million) triple-tranche Sustainability-Linked Bond (SLB).
It is the largest SLB issued in Thailand and the first offered to both institutions and high-net-worth investors.
The bond is part of IVL’s financing strategy across a range of instruments linked to the company’s sustainability targets and is aligned with internationally accepted standards.
It is linked to IVL’s aims of reducing GHG emissions intensity by 10% by 2025 from a 2020 base, increasing the recycling of PET bale input to 750,000 tons per year by 2025, and achieving 25% renewable electricity consumption in 2030.
With the orderbook peaking at over THB 17.8 billion due to strong interest in the sustainability-linked instrument, oversubscription was around three-times over the planned issuance amount of THB 6 billion, with a green shoe option of THB 4 billion. In view of the strong orderbook from investors, the company decided to exercise the green shoe option and increased the issuance to THB 10 billion, setting a new benchmark as the largest SLB transaction in Thailand.
IVL appointed Bangkok Bank, Kasikorn Bank, Krungthai Bank, Siam Commercial Bank, and The Hongkong and Shanghai Banking Corporation Bangkok Branch as arrangers and bookrunners for the transaction.
On 23 September 2021, the bond was assigned an AA rating and a “stable” outlook by TRIS Rating, following a strong recovery of petrochemicals and derivatives and IVL’s growing profitability.
Under the terms, all tranches must purchase Energy Attribute Certificates (EAC) or voluntary carbon offsets in the event of failure to meet the sustainability performance targets. The testing dates are 31 December 2025, and 31 December 2030 nor. SPT performance will be independently verified upon the testing dates.
Proceeds for the issuance will be used to finance IVL’s corporate working capital and refinance existing debt.