Eaton Announces $1.3 Billion Sustainability-Linked Bond Targeted Toward Emission Reductions
- Sustainability-linked notes will target Scope 1 and 2 greenhouse gas (GHG) emissions reductions
- The financing marks a new step forward in Eaton’s commitment to science-based targets to mitigate climate change
- Company closes $1.3 billion 2033 sustainability-linked and $700 million 2052 senior notes
Power management company Eaton has announced it closed an offering of sustainability-linked and senior notes.
Eaton’s sustainability-linked notes offering represents a significant step in aligning the company’s long-term financing structures with its ambitious environmental targets. The sustainability-linked notes interest rate is subject to the achievement of a Sustainability Performance Target (SPT) to achieve at least a 40% reduction in absolute Scope 1 and Scope 2 GHG emissions by year-end 2027, relative to a 2018 baseline.
“Achieving our sustainability goals is as critical to our business as meeting our financial commitments, and this financing aligns both strategies,” said Harold Jones, chief sustainability officer and executive vice president, Eaton Business System, Eaton. “Tackling climate change requires innovative solutions, and this offering will enable us to invest in energy efficiency, renewable energy and other emissions-reduction efforts.”
In 2020, Eaton announced its commitment to science-based targets to mitigate climate change. The targets were approved by the Science Based Target Initiative (SBTi) and include cutting carbon emissions from the company’s operations by 50% and reducing Scope 3 emissions by 15% by year-end 2030, relative to a 2018 baseline. Eaton also established plans to invest $3 billion in research and development for sustainable solutions by 2030. In Eaton’s latest 2021 Sustainability Report, the company announced it was on pace to meet many of these goals.
Eaton published a Sustainability-Linked Bond Framework, and commissioned S&P Global Ratings to issue a Second Party Opinion (SPO) on the Framework’s alignment to the Sustainability-Linked Bond Principles (SLBP).
The sustainability-linked notes due 2033 and senior notes due 2052 were issued by Eaton Corporation and unconditionally guaranteed by Eaton Corporation plc and certain of its subsidiaries.
BofA Securities, Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, minority-owned bank Loop Capital Markets LLC, and Wells Fargo Securities, LLC acted as joint book-running managers for the offering and BofA Securities, Inc. also acted as sustainability structuring agent for the offering. In addition to these joint book runners, the transaction included minority and veteran-owned firms Academy Securities, Inc., AmeriVet Securities, Inc., and CastleOak Securities, L.P. as co-managers.
Source: Eaton
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