ROTTERDAM, NETHERLANDS — Louis Dreyfus Company (LDC) on Dec. 12 announced the renewal of its two $400 million revolving credit facilities (RCFs) for its Europe, Middle East and Africa (EMEA) region, a two-year and a three-year facility respectively, including identical sustainability-linked pricing mechanisms.
The facilities are issued by Louis Dreyfus Company Suisse S.A., to refinance — one year ahead of their maturities — the previous two- and three-year facilities.
The transaction completes LDC’s renewal of its three regional RCFs, following North America in May and Asia in August, all of which now incorporate the same sustainability-linked mechanism linking the RCF interest rate to LDC’s performance in meeting reduction targets in four areas — CO2 emissions, electricity and energy consumption, water usage, and solid waste sent to landfill.
According to the agreement, LDC will benefit from an interest rate margin reduction for every year in which it improves its sustainability performance, as validated by an independent auditor.
“We are pleased to have linked all three of LDC’s regional RCFs with the company’s environmental targets in 2019,” said Federico Cerisoli, LDC’s Group chief financial officer. “Commitments are not just words — they engage our whole organization. So, linking the outcomes of those commitments to our financing is a coherent and logical step.”
Michael Gelchie, LDC’s chief operating officer, added, “LDC has a broad geographic presence and business portfolio in EMEA, and it is essential that as we source, process and supply agricultural and food products, we strive to minimize our environmental impact. Sustainability-linked funding further serves to federate our efforts across the company to achieve our goals, and to deliver fair and sustainable value across our business.”
The transaction was led and anchored by Crédit Agricole Corporate and Investment Bank, ING Bank N.V., Rabobank U.A., Société Générale and Sumitomo Mitsui Banking Corporation, as joint lead arrangers and bookrunners. Crédit Agricole Corporate and Investment Bank and Rabobank acted as sustainability coordinators.
In recent months LDC has been stepping up its game in 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. Since then in June, SCF members, including LDC, published their first soy sustainability reports.
Also in June, LDC published its 2018 Sustainability Report, to set data driven-benchmarks for is carbon profile, reducing its energy and electricity consumption and working with suppliers to achieve its sustainability goals.