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BNP Paribas Closes First Environment-Linked RCF in Latin America with Empresas CMPC

August 13, 2020, 08:15 AM
Filed Under: Industry News
Related: BNP Paribas

BNP Paribas, a premier global bank, announced that it has closed a $100 million syndicated Revolving Credit Facility (“RCF”) structured as a sustainability-linked loan (“SLL”) with Empresas CMPC S.A. (“CMPC” or the “Company”), a Chilean pulp and paper company. BNP Paribas, as Joint Lead Arranger and Sole Sustainability Coordinator, led the group of banks involved in the transaction, and will be the Administrative Agent of the facility.

This is the first SLL for CMPC and the first for BNP Paribas in Latin America. It is also the first SLL RCF in Chile with comprehensive environmental Key Performance Indicators (“KPIs”). The RCF includes four environmental sustainability performance targets as described below:

  • Greenhouse gas emissions;
  • Industrial water use;
  • Industrial waste to landfill;
  • Area for protection, conservation, and restoration

The recent launch of the UN-backed Taskforce for Nature-related Financial Disclosures (TNFD), of which BNP Paribas is part of, is reinforcing the need to address biodiversity loss and manage associated nature related risks. The aforementioned KPIs align with tackling this objective, along with CMPC’s public corporate sustainability goals, and cover a broad range of key sustainability issues for CMPC and the pulp & paper industry as a whole, motivating the Company to outperform holistically. The SLL also offers incentives to achieve results for the Company in line and beyond publicly expressed commitments.

“With our stated purpose to accompany our clients on their journey to a more sustainable future by creating sustainable financing solutions, we are delighted to advise CMPC in their comprehensive SLL. This transaction highlights the positive role sustainable finance can play in reinforcing a holistic approach to sustainable forest management so that CMPC can continue to build on their already impressive sustainability and business ambitions,” said Florence Pourchet, Head of CIB Latin America at BNP Paribas, who also oversees the bank’s Sustainable Finance strategy in the Americas.

BNP Paribas has acted as Sustainability Coordinator or Sustainability Structuring Agent in a number of sustainable finance transactions this year. In late May 2020, Corporación Andina de Fomento (CAF), the Development Bank of Latin America, issued Latin America's first Covid-19 Response Bond, with BNP Paribas acting as lead bookrunner. The €700 million five-year social bond aims to support its member countries' Covid-19-related relief and recovery costs.

In North America, the bank closed a sustainability-linked loan with JetBlue Airways in February 2020 via an amendment to its existing Senior Secured Revolving Credit Facility – the first sustainability-linked RCF for the airline industry. In the same month, it closed another sustainability-linked syndicated credit facility in Canada with WSP Global and in January 2020 it closed a bi-lateral, incentive-linked corporate RCF with Brookfield Renewable Partners in Canada. In EMEA, the bank closed the largest ever ESG-linked Subscription Credit Facility with EQT, a Stockholm-based investor, linking responsible investment metrics with the private equity (PE) space.

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