Pfleiderer Group issued a sustainability-linked senior secured bond with a total volume of €750m via PCF in mid-April. Both companies are headquartered in Neumarkt, Germany. The bond terms are linked to a number of sustainability goals. For instance, the company has committed to increasing its use of recycled wood to 44% by 2022 and 50% by 2025. Scope 1 and scope 2 greenhouse gas emissions will also be lowered by 8% and 21% by 2022 and 2025 respectively from their 2020 baseline. Pfleiderer will pay a penalty interest rate if it fails to meet either of the 2022 targets. According to Pfleiderer, this is the first sustainability-linked bond to be offered by a German issuer. It also includes the first euro-denominated sustainability-linked floating-rate note.
On 12 April, Moody’s Deutschland set the corporate family rating (CFR) for PCF at B2 and the probability of default rating (PDR) at B2-PD in connection with the issue of the new sustainability bond. The outlook was described as stable on this basis. The CFR for PCF will replace the rating issued to date for Pfleiderer Group, which was lowered from Ba3 to B1 in mid-July 2018. At the same time, Moody’s revised the PDR rating from Ba3-PD to B1-PD. By way of explanation for this change, the rating agency cited changes to two lines of credit agreed on in 2017. The new sustainability bond was also given a B2 rating. According to Moody’s, Pfleiderer plans to use the proceeds from the new bond to refinance a €445m revolving line of credit, among other projects.
