With its “green” Schuldschein loan, Dürr AG is going one step further in terms of sustainability compared with its earlier funding operations. For the first time, the MDax-listed company is committing to the exclusively “green” use of the funds raised. Until now, coupons have generally been linked to sustainability performance.
“Sustainability is becoming increasingly important for our business: We are supporting our customers in their efforts to decarbonize their production processes. With our “green” Schuldschein loan, we are highlighting this strategy and securing additional funds to accelerate the development of climate-friendly products and technologies,” explained CFO Dietmar Heinrich. At the same time, the Dürr Group will also be using the proceeds from the issue to fund operating expenses arising from taxonomy-aligned customer projects and for investments in the sustainability of its own facilities. Examples include the installation of photovoltaic systems for the internal production of power and the construction of energy-efficient buildings.
Oversubscribed multiple times, the “green” Schuldschein loan consists of tranches with long-term tenures of four, five and seven years. The preliminary average coupon is 4.76%, with the proceeds to be collected by Dürr AG on April 20, 2023. Towards investors — commercial banks and savings banks in Germany and abroad — Dürr AG has made a commitment not only to use funds in a green way, but also to further improve its sustainability performance. Specifically, it wants to achieve an ISS “Prime Status” sustainability rating in 2025 (currently: C-); otherwise, investors will be entitled to a higher coupon. Says CFO Dietmar Heinrich: “Demand for our ‘green’ Schuldschein loan was exceptionally strong. More and more investors are looking for quality issuers with a sustainability-aligned business model and ambitious ESG targets.”
The transaction was arranged and structured by Commerzbank, Deutsche Bank, ING and LBBW. Dürr AG’s legal advisor was Freshfields Bruckhaus Deringer. In issuing the Schuldschein loan, the company benefited from its sustainable finance framework, which was published in November 2022. The framework specifies the purposes for which sustainable financing instruments such as the “green” Schuldschein loan may be used and imposes regular reporting obligations on Dürr AG. This transparency meets investors’ information requirements and makes it substantially easier to raise “green” funds on the capital market.