ROTTERDAM, THE NETHERLANDS — Louis Dreyfus Company B.V. (LDC) is renewing its $750 million revolving credit facility (RCF) in North America, including a sustainability-linked pricing mechanism for the first time. The transaction replaces its previous three-year $750 million RCF.
Through the sustainability-linked mechanism, the RCF interest rate is linked to performance against LDC’s four performance indicators, which set reductions in CO2 emissions, electricity consumption, water usage and solid waste sent to landfill.
“Our position in the food value chain puts us at the heart of some of the world’s most pressing challenges, such as the need to feed a growing world population sustainably,” said Federico Cerisoli, LDC’s Group chief financial officer. “As a company, we are committed to fair and sustainable value creation, and with this first sustainability-linked RCF, today we are linking that commitment to our financing. It is also positive that the banking community is increasingly rising to the challenge, through novel financing options.”
As part of the agreement, there will be an interest rate margin reduction for each year in which LDC makes improvements in its sustainability performance, with an independent auditor providing validation.
“We intend to implement similar sustainability-related targets as our other two RCFs come up for renewal in Asia and EMEA,” Cerisoli said.
The transaction was led and anchored by BNP Paribas, Bank of America, ICBC, ING, MUFG, Société Générale and SunTrust as joint lead arrangers and bookrunners, with ING acting as sustainability structuring agent and BNP Paribas as sustainability coordinator.
This is not LDC’s first endeavor committing to sustainability. In February as a member of the World Business Council for Sustainable Development’s (WBCSD) Soft Commodities Forum (SCF), LDC committed to supporting transparent and traceable soy supply chains in Brazil’s Cerrado region. SCF member companies recognize the existing risks and commit to act on supporting transparent and traceable soy supply chains in Brazil.