Inversiones CMPC, the investment division of Chilean pulp and paper producer CPMC, sold $500 million worth of green sustainability-linked bonds (SLBs) on Wednesday in a deal that was five times oversubscribed, sources told LatinFinance.
The company priced the new 6.125% 2034 notes at 99.646 to yield 6.173%, equal to a spread of 185 basis points over US Treasury bonds. It had opened the deal earlier in the day at around 215 basis points, said a source involved in the deal.
“Given the strength of the book we went to straight to launch and skipped guidance phase,” the source said.
Demand for the green SLBs peaked at $3.3 billion before coming down to $2.5 billion, according to a second source familiar with the deal.
CMPC offered to pay a step-up rate of 45 basis points if it does not lower greenhouse gas emissions by 50% by December 2030, it said in a presentation to investors.
BBVA, Bank of America, BNP Paribas, MUFG and Santander were the global coordinators, while Crédit Agricole, Mizuho and Scotiabank were the joint bookrunners on the Rule 144A/Reg S deal, according to CMPC.
S&P Global Ratings and Fitch Ratings and both assigned BBB ratings to the new SLBs.
CMPC is expected to use the proceeds to refinance debt and cover general corporate expenses, including funding for green projects over the next two years, according to S&P and Fitch.
CMPC issued $500 million worth of SLBs in 2021 with a step-up rate of 12.5 basis points and another $500 million in June last year with a step-up rate of 60 basis points.
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