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SEB advises Vestas on sustainability-linked bonds

SEB acted as global coordinator when the global wind turbine manufacturer Vestas borrowed EUR 1 billion on Tuesday by issuing two sustainability-linked bonds with a maturity of 7 and 12 years. SEB also acted as the sole sustainability advisor in the development of the company's framework for sustainability-linked bonds.

“It is a true privilege to be part of this transaction for a leading sustainability player such as Vestas, who not only produce climate-positive products, but challenge themselves by linking their financing to their ambitious sustainability targets”, says Fredric Nilsson, from DCM who worked with the transaction.

The transaction, which was completed on Tuesday, is the first issuance of sustainability-linked bonds in Denmark, where Vestas was founded in 1898 and has its headquarters.

The bonds are linked to three KPI's that are aligned with the company's 2030 sustainability targets. This involves reducing greenhouse gas emissions in its own operations by 100 percent, reducing emissions from the supply chain (scope 3) by 45 percent per MWh generated, and reduce the material efficiency ratio by 90 percent per MW produced and shipped

“Material efficiency and emission reductions in the supply chain (scope 3) are substantial challenges for the wider wind industry – to set yearly targets for these challenges and include them as a performance commitment towards bond investors is brave and demonstrates leadership” says Lars Eibeholm, Head of Sustainable Banking, Denmark

The sustainability-linked structure means that Vestas' cost of financing is linked to the achievement of specific targets in relation to the above three KPI's. The transaction received significant investor demand despite the volatile market environment.