EQT AB (publ) has successfully completed a EUR 500,000,000 sustainability-linked bond maturing in 2031 (the “SLB”). The SLB has a coupon of 0.875 percent per annum, which is subject to an increased rate upon the occurrence of triggers linked to certain sustainability performance targets.

The SLB is EQT AB’s first bond and underscores its approach of having sustainability as an integral part of the business model of both the EQT AB Group and the EQT funds’ portfolio companies. The SLB is the first sustainability-linked note to be issued by a private equity firm where the bond’s coupon rate is connected to predetermined sustainability performance targets. The SLB therefore enables EQT AB to connect sustainability with its funding cost and thereby incentivize the achievement of its sustainability ambitions. The chosen targets for the SLB are related to setting science based targets for greenhouse gas reductions and to EQT AB’s commitment to gender diversity, both within the EQT AB Group and in the EQT funds’ portfolio company boards.

The SLB will further increase the EQT AB Group’s financial flexibility and be used for corporate purposes, supporting the EQT AB Group’s growth initiatives and long-term strategy. The SLB follows the signing of a EUR 1 billion revolving credit facility in December 2020 which will also incorporate a pricing mechanism linked to ESG-related objectives.

Christian Sinding, CEO said: “As a purpose driven investor and owner, EQT combines value creation for its investors with a broader societal and environmental perspective. The bond marks another step in how we put our purpose of making a positive impact into practice, in line with EQT’s overall approach of integrating sustainability throughout its activities, both on EQT AB Group level and within the EQT funds”.

Kim Henriksson, CFO, added: “The sustainability-linked bond further increases EQT’s financial flexibility to support growth initiatives and our long-term strategy. The bond diversifies EQT’s funding sources and establishes a direct link between EQT’s financing cost and sustainability ambitions”.

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EQT AB’s long-term issuer credit rating has been confirmed by Fitch Ratings Ltd. to be A- with a stable outlook as at 4 May 2021.

The ESG aspects of the SLB have been structured to reflect EQT AB’s Sustainability-Linked Financing Framework, which was established in accordance with the ICMA’s sustainability-linked bond principles.

The SLB has been listed and admitted to trading on the Luxembourg Stock Exchange’s Euro MTF market.

Characteristics of the Sustainability-Linked Bond:

Total amount issued: EUR 500,000,000

Maturity: 10 years

Interest rate: 0.875 percent per annum, subject to an increased rate upon failure to achieve certain sustainability key performance targets

Listing: Euro MTF, Luxembourg Stock Exchange

Goldman Sachs Bank Europe SE and Morgan Stanley & Co. International plc acted as global coordinators and joint lead managers, BNP Paribas, Nordea Bank Abp and Skandinaviska Enskilda Banken AB (publ) acted as joint lead managers, and Deutsche Bank Aktiengesellschaft and DNB Bank ASA acted as co-lead managers in connection with the bond issue (collectively, the “Managers”).

Source: EQT AB