Group Boticário’s $196 Million Sustainability-Linked Bonds Offering

Pinheiro Guimarães advised Group Boticário and Banco Itaú BBA on the deal.

Brazilian beauty products Group Boticário (through Cálamo Distribuidora de Produtos de Beleza S.A.) completed the issue of the first sustainability-linked bonds in the local market, raising 1 billion reais (US$196 million). Banco Itaú BBA acted as underwriter.

The bonds, which carry an interest rate of 2.3%, were structured with a sustainability-linked performance mechanism tied to the use of renewable energy and recycling of solid waste. The targets are set for each year until 2024.

Grupo Boticário aims to rely on 95% renewable energy by 2021 and 100% by 2022, thereafter remaining fully reliant on renewable energy. It has also pledged to recycle 95% of its solid waste in 2021 and 2022, and then increase the threshold by 1 percentage point per year until 2024.

The transaction is the first offering of sustainability-linked notes in the Brazilian capital markets, but not the first sustainability-linked bond issuance by a Brazilian company. Pulp and paper giant Suzano issued such bonds internationally in September 2020, raising US$750 million. Two months later, the company raised another US$500 million in a second sustainability-linked bond offering. Pinheiro Guimarães has also advised on both those transactions, representing the underwriters.

Group Boticário distributes beauty and personal hygiene products across Brazil and is based in the southern city of Curitiba.

Pinheiro Guimarães acted as deal counsel and advised Group Boticário and Banco Itaú BBA with a team led by partners Ivie Moura Alves (Picture) and Francisco José Pinheiro Guimarães and associates Luiza Furtado and Mariana Bastos.

Involved fees earner: Mariana Jasmin Bastos – Pinheiro Guimarães; Luiza Furtado – Pinheiro Guimarães; Ivie Moura Alves – Pinheiro Guimarães; Francisco José Pinheiro Guimarães – Pinheiro Guimarães;

Law Firms: Pinheiro Guimarães;

Clients: Banco Itau BBA; Grupo Boticário;


Author: Ambrogio Visconti.