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The Industry’s First Sustainability-Linked Bond in EMEA from Coca-Cola İçecek

Latest News Jan 21, 2022

By linking its sustainability focused business model to its funding strategy, Coca-Cola İçecek (CCI) issued a bond with a lower cost compared to  country reference borrowing rate in the international markets. CCI has issued the largest sustainability-linked bond in Turkey to date, with an issue size of USD 500 million, and under the conditions of which the company will aim to increase its water efficiency 13% by 2027 and 17 % by 2029. CCI also achieved an important milestone with an effective interest rate of 4.75 per cent. The bond matures in January 2029.

Keeping its sustainability goals at the core of its operations, CCI issued Turkey's largest sustainability-linked bond to date with a relatively lower cost compared to the country reference borrowing rate in the international markets. Serving more than 430 million consumers in 11 countries, including Turkey, CCI signed the first sustainability-linked bond of the beverage industry in the Europe, Middle East and Africa (EMEA) region.

Following a series of meetings with over 75 investors, the bond was positively received by investors despite the weakened risk appetite towards developing countries. CCI issued a USD 500 million bond with a 7-year maturity at an effective 4.75% interest rate. 34% of CCI’s bonds were sold to investors in the US, 30% in the European Union and 16% in the United Kingdom. The bond was the first international corporate issuance from Turkey in over 6 months.

CCI credits the successful bond issuance to its worldwide known brand portfolio, its business model focusing on high-potential countries and its corporate governance principles, as well as its balanced financial statements, the sustainability structure of the bond and the consistent shareholder structure with Anadolu Group, one of the leading holding companies in Turkey, and The Coca-Cola Company, one of the world's leading companies.

With sustainability at the core of its business model, CCI also highlighted the strong link between its financial strategy and sustainability focus areas with this bond issuance. Sustainalytics, an international ESG assessment company, provided a second party opinion, and assessed CCI’s sustainability framework targets as strong and categorised its commitment to increase its water efficiency 13% in 2027 and 17% by 2029 as ambitious.

Coca-Cola İçecek CEO Burak Başarır said, “We are serving over 430 million consumers in 11 countries, including Turkey, and continue to create value for all our stakeholders. As the most concrete example of our sustainability focus and integrated business model, we issued our first sustainability-linked bond. We are proud to issue the sustainability-linked bond as the first in the beverage industry both in Turkey and in the wider EMEA region. The CCI bond, also brought the heat to the Turkish market.” In light of the fact that CCI received a "BBB-" Investment Grade rating from the international credit rating agencies, S&P Global and Fitch Ratings in 2021, Başarır said, "We have an advantageous bond issue with our successful performance also appraised by international credit rating agencies."

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