Suzano in First-Ever Sustainability-Linked Notes and Concurrent Tender Offer
September 14, 2020
Cleary Gottlieb represented Suzano S.A. (Suzano) and its Austrian wholly owned finance company Suzano Austria GmbH (Suzano Austria) in the offering of $750 million 3.75% global notes due 2031, issued by Suzano Austria and guaranteed by Suzano.
These bonds are the first KPI-linked bonds in the Americas, and are linked to Suzano’s ability to achieve, by December 31, 2025, a specified target reduction of greenhouse gas emissions, as confirmed by an independent external verifier, under Suzano’s new sustainability-linked securities framework adopted in September 2020. If this target is not met, the coupon rate on the bonds will automatically step up by 25 bps to 4% per annum. The bonds were sold in a takedown from Suzano’s debt shelf registration statement on file with the SEC, and the bonds will be listed on the New York Stock Exchange.
The underwriters of the notes were BNP Paribas Securities Corp, BofA Securities Inc., Credit Agricole Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Rabo Securities USA, Inc., Scotia Capital (USA) Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc., Santander Investment Securities Inc., and SMBC Nikko Securities America Inc. The transaction priced on September 10, 2020, and closed on September 14, 2020.
The net proceeds of the notes were used to fund concurrent tender offers to purchase any and all of the outstanding 5.250% notes due 2024 and the outstanding 4% notes due 2025, both issued by Fibria Overseas Finance Ltd., a Cayman wholly owned subsidiary of Suzano, and any and all of the outstanding 5.75% notes due 2026 issued by Suzano Austria. The tender offers launched on September 2, 2020, and expired on September 10, 2020, with settlement on September 15, 2020. The dealer managers for the tender offer were BNP Paribas Securities Corp., BofA Securities Inc., Credit Agricole Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Rabo Securities USA Inc., and Scotia Capital (USA) Inc.