Helping Coles with its ambition to be Australia’s most sustainable supermarket
Coles completed a series of four-year bilateral debt facilities totalling A$1.3 billion structured as Sustainability Linked Loans.
This is the first loan of its type for an Australian supermarket operator and the largest retail Sustainability-Linked Loan in the local market to date.disclaimer
The financing aligns with the company’s ambition to be Australia’s most‑sustainable supermarket.
The need
Coles wanted to drive sustainability across its business by linking the cost of its capital to the implementation of its sustainability strategy.
The solution
A Sustainability Linked Loan commits a borrower to key environmental, social and governance targets in consideration for a discount on the loan margin.
Coles' aspirations
Coles has committed to targets relating to greenhouse gas emissions, women in leadership and waste diversion from landfill.
These targets are a subset of Coles’ broader sustainability ambitions under the focus areas of ‘Together to Zero’ and ‘Better Together’.
The Coles Sustainability Linked Loan ties the company’s performance against these targets to the loan margin.
“Coles has been very clear around the importance of sustainability to its strategy, and dedicated significant resources to ensure that this strategy is put into action.”
Karen Brown, Director – Industrials, ANZ said.
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ANZ's solution
A Sustainability Linked Loan is forward-looking, committing a borrower to making progress against key environmental, social and governance targets.
A borrower typically enjoys a margin discount if the targets are met, and a margin premium if the targets are not met.
Coles appointed ANZ as its joint sustainability coordinator for this Sustainability Linked Loan financing.
“By linking the company’s cost of capital directly to their sustainability commitments, Coles is able to demonstrate how serious it is about its ambition to become Australia’s most sustainable supermarket.”
Tania Smith, Director – Sustainable Finance, ANZ said.
Want to know more?
Over the past year ANZ has arranged over A$70 billion (equivalent) of Green, Social and Sustainability Bonds and Loans across Australia, New Zealand and Asia in AUD, NZD, USD, CNH and EUR for a broad range of corporate and frequent issuers.
Key/Award-winning transactions in which ANZ has been Sustainability Coordinator and/or senior JLM/MLA include:
Lendlease issued a highly successful A$500 million 7-year green bond. The transaction was their debut green bond transaction, aligning with commitment and track record of integrating sustainability throughout the business.
European Investment Bank (“EIB”) issued a A$1.25 billion 6½-year Climate Awareness bond.
International Finance Corporation A$55 million 15-year Social Bond - National Housing Finance & Investment Corp $562 million 12-year Sustainability Bond - ANZ A$1.25 billion 10½-year SDG (Sustainable Development Goals) Bond.
Lendlease A$300 million Green Bond. Solidified Lendlease’s position as largest AUD corporate green bond issuer and largest AUD 10-year corporate green bond.
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ANZ database, BBG New Energy Finance, Refinitiv Loan Pricing Corp (as at 14 September 2021)
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