Natura Cosméticos said it plans to raise BRL1.3 billion ($245 million) in the sale of sustainability-linked debentures in the local market.
The company, a division of the Brazilian cosmetics company Natura & Co, aims to price the 2029 notes at the DI interbank lending rate plus 1.2%, it said in a securities filing on Tuesday.
Natura has tied the cost of the financing to targets for biodiversity conservation in the Amazon and stepping up the use of local ingredients in its industrial process. If it misses the targets, it will have to pay an extra 0.15% interest on the bonds, the company said.
Itaú Unibanco is managing the deal, Natura added.
Fitch Ratings assigned the proposed debenture an AAA rating on the national scale.
“Natura has solid business positions in Brazil and Latin America, with strong brands and a robust product portfolio,” Fitch said in a report.
The ratings agency said that while Natura & Co, the parent company, is considering spinning off its Avon unit, such an eventuality would not have “any relevant impact on Natura’s business profile or ratings … as its capital structure would remain solid.”