Business

Turkey’s largest sustainability indexed bond issuance is from Coca-Cola

Coca-Cola Icecek (CCI) has combined its sustainability-focused operating framework with its funding strategy, and issued bonds at low cost according to the country’s borrowing rate reference to foreign markets. The company made Turkey’s largest sustainability-indexed bond issuance to date with $500 million.

Coca-Cola Icecek (CCI) signed the first sustainability indexed bond of the beverage industry in the Europe, Middle East and Africa (EMEA) region. Within the scope of the borrowings realized in this period when the risk appetite towards developing countries weakened, CCI issued $500 million Bonds with a 7-year maturity at an interest rate of 4.75%. With this issuance, CCI has realized Turkey’s largest sustainability-indexed bond issuance at a lower cost than the country’s borrowing rate reference to foreign markets.

Coca-Cola Icecek CEO Burak Basarir said, “We serve over 430 million consumers in 11 countries, including Turkey, and operate to create value for all our stakeholders. We issued our sustainability indexed bond as the most concrete example of our sustainability focus and integrated business model. We are proud to issue the first sustainability-indexed bond of both Turkey and the beverage industry in the EMEA region, with the CCI bond, which also activates the Turkish market.” Reminding that CCI received an investment grade rating of “BBB-” by the international credit rating agency S&P and Fitch in 2021, Basarir said, “With our successful performance confirmed by international credit rating agencies, we have made a highly advantageous bond issuance.”

The first private sector issue to come out of the Turkish market in the last six months, 34% of the bonds were sold in the US, 30% in the European Union and 16% in the UK. In addition to having some of the world’s most important brands in its portfolio, CCI’s business model that focuses on corporate governance principles in high-potential countries, its strong balance sheet, the sustainability aspect of the bond, and its stable shareholding structure with Anadolu Group and The Coca-Cola Company played an important role.

Accepting sustainability as the basis of its business model, CCI also revealed the strong link between its financial strategy and sustainability focus areas with this bond. As a result of the meetings held with more than 75 investors before the issuance, the bond was received positively by the investors. Sustainalytics, the independent ESG research, rating and data company giving a Second Party Opinion, strongly rated the objectives outlined in CCI’s sustainability framework document. He described CCI’s commitment to increase water use efficiency in 2020 by 13% by 2027 and by 17% by 2029 as ambitious.

Source: Hurriyet / Translated by Irem Yildiz

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