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Evonik issues first green hybrid bond

August 30/2021

MOSCOW (MRC) -- Evonik Industries AG has successfully issued a first green hybrid bond with a nominal volume of EUR500 million, as per the company's press release.

This bond is the specialty chemical company's first green finance issuance and follows the publication of Evoniks Green Finance Framework on August 24, 2021, which integrates sustainability even more closely into Evoniks finance strategy.

As a globally active specialty chemicals company, responsibility and long-term economic success are two sides of the same coin. Sustainability has developed into a growth driver at Evonik. The demand for products with market-superior sustainability benefits - Next Generation Solutions - is developing dynamically. The majority of proceeds will therefore be used to finance investments in Next Generation Solutions. These include, for example, biosurfactants, sustainable food packaging, innovative insulation materials and membranes for gas filtration. Evonik plans to further increase the proportion of sales it generates from Next Generation Solutions in the coming years from 35 percent now.

At the same time, Evonik will further reduce its own ecological footprint. To this end, the company continuously invests in its processes along the entire value chain. The proceeds from the green hybrid bond help Evonik minimize its own resource requirements, for example by financing initiatives to reduce its own CO2 footprint.

Evonik aims to be a best-in-class specialty chemicals company and our Sustainability Strategy 2020+ is an expression of this aspiration. With the publication of our Green Finance Framework and with this green hybrid issuance we are reflecting our strong commitment to sustainability, also in financing, said Ute Wolf, chief financial officer of Evonik.

The green hybrid bond was significantly oversubscribed and generated strong interest from a broad circle of institutional investors. Evonik benefited from its good debt capital markets reputation, its attractive sustainability profile and the favorable market environment.

The green hybrid bond has a formal lifetime of 60 years. Evonik has a first redemption right in 2026. It is subordinated to other financial liabilities. In addition to the new green hybrid bond, Evonik announced a tender offer on August 24, 2021 to repurchase its outstanding hybrid bond of EUR500 million, which has an interest rate of 2.125 percent per year. Results of the tender offer will be published on 2 September 2021.

By combining the issuance of a new green hybrid bond with a repurchase offer, Evonik can refinance its outstanding hybrid bond at an early stage and offer current investors an attractive opportunity to reinvest in Evonik's hybrid capital with a sustainability focus. The annual interest rate on the green hybrid bond is 1.375 percent per year. This results in interest savings of 3.8 million per year compared to the repurchased hybrid bond.

As MRC reported earlier, in February, 2020, Dow and Evonik entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evoniks corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 33,000 employees.
Author:Margaret Volkova
Tags:propylene, petrochemistry, adhesives, Dow, Evonik, sustainable development, Germany.
Category:General News
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