Klabin’s $500 Million Sustainability Bonds Offering


Clifford Chance, Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga, Milbank and TozziniFreire advised on the transaction

Klabin has announced the issue of a bond linked to sustainability targets, called Sustainability-Linked Bond (SLB). The bond, whose value is US$ 500 million, matures in 10 years, with coupon of 3.2% p.a. In this operation, the Company undertakes to achieve three targets related to the ESG (Environmental, Social and Governance) criteria by 2025.

Of the three targets, two are directly related to industrial production – reducing the consumption of natural resources and increasing the recycling of both water and solid waste – while the third is related to biodiversity, with the focus on sustainable management and restoration of biomes. As for the target related to water, Klabin aims to reduce water consumption to 3.68 m3 per ton of product, which is equivalent to a reduction of approximately 16.7% from the baseline in 2018 and complies with SDG 6 – Clean Water and Sanitation. In case of solid waste, the Company will increase the percentage of solid waste reused and recycled to 97.5%, complying with SDG 12 – Responsible Consumption and Production. Regarding the biodiversity target, Klabin is committed to reintroducing two extinct or endangered species in the company’s forest areas, in compliance with SDG 15 – Life on Land.

Bank of America (BofA), Bradesco BBI, Citigroup, Itaú BBA, JP Morgan and Morgan Stanley acted as initial purchasers on the offering.

Clifford Chance advised Klabin S.A. and Klabin Austria GmbH with Anthony Oldfield (Picture), Patrick Jackson and Shane Meckler.

In Brazil, Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga advised Klabin S.A. and Klabin Austria GmbH with Bruno Mastriani Simões Tuca, Flavia Magliozzi and Lucca Rizzo.

Milbank advised Banco Bradesco BBI S.A., BofA Securities, Inc., Citigroup Global Markets Inc., Itau BBA USA Securities, Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC with Andrew R. Walker, Tobias Stirnberg, Alexia Theodora Raad and Marina Carvalho Rodriguez.

In Brazil, TozziniFreire advised Banco Bradesco BBI S.A., BofA Securities, Inc., Citigroup Global Markets Inc., Itau BBA USA Securities, Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC with Alexei Bonamin, Felipe Tulio de Paiva, Flávia Biagiotti and Mariana Pereira.

Involved fees earner: Patrick Jackson – Clifford Chance; Shane Meckler – Clifford Chance; Anthony Oldfield – Clifford Chance; Flávia Magliozzi – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Bruno Mastriani Simões Tuca – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Lucca Rizzo – Mattos Filho Veiga Filho Marrey Jr & Quiroga; Alexia Raad – Milbank; Tobias Stirnberg – Milbank; Andrew Walker – Milbank; Alexei Bonamin – Tozzini Freire ; Mariana Fiorotto Pereira – Tozzini Freire ; Felipe Tulio de Paiva – Tozzini Freire ;

Law Firms: Clifford Chance; Mattos Filho Veiga Filho Marrey Jr & Quiroga; Milbank; Tozzini Freire ;

Clients: Banco Bradesco BBI S.A.; Bank of America Securities; Citigroup Global Markets Ltd; Itaú BBA USA Securities; JP Morgan Securities; Klabin S.A.; Morgan Stanley;

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Author: Ambrogio Visconti.