Bridgestone Issues $1.1 Billion Sustainability-Linked Credit Facility
Tire and automotive equipment manufacturer Bridgestone Americas announced the issue of a $1.1 billion sustainability-linked credit facility. According to Bridgestone, the issue marks one of the first of its kind in the U.S. tire industry.
Paolo Ferrari, President and CEO of Bridgestone Americas, Inc., said:
“Sustainability is at the center of our company’s mission to realize innovations that improve the way people move, live, work and play. We will continue to take bold steps to fulfill our commitment to our customers and to society as we endeavor to be a world-leading sustainable solutions company.”
Sustainability linked securities are an emerging form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. In the case of the Bridgestone credit facility, the financing features a sustainability-linked pricing adjustment mechanism that adjusts interest rate based on the company’s ESG rating, as determined by ratings providers Sustainalytics and FTSE Russell, with borrowing costs falling as the ratings improve.
Jose Anes, Vice President and Corporate Treasurer of Bridgestone Americas, said:
“This committed credit facility reinforces our commitment to sustainability by linking the rate structure of the facility to independent assessments of our continued efforts to advance Bridgestone’s sustainability practices.”
Bridgestone stated that it partnered with SMBC, a leading global bank and pioneer in sustainable and positive impact loans, to execute its inaugural syndicated sustainability-linked credit facility. Hiro Hyakutome, CEO and Head of SMBC Americas Division, said:
“SMBC is excited to help our partners at Bridgestone Americas further elevate their position and stake as a sustainability leader in the tire industry through this revolving credit facility. Our deep and well-recognized expertise in green loans and sustainability-linked loans helps our global clients achieve their near- and longer-term ESG objectives. We look forward to continuing to help support Bridgestone’s sustainability initiatives.”