Italian energy infrastructure and services provider Snam announced that it has raised $2 billion in a multi-tranche sustainability linked bond (SLB) offering, with the cost of debt tied to the company’s interim- and long-term targets to reduce greenhouse gas (GHG) emissions across its value chain.

According to the company, the offering is the first-ever SLB linked to a net zero target across Scopes 1, 2, and 3 GHG emissions.

Notably, while the volume of sustainability-linked bond offerings have declined significantly over the past several quarters on investor concerns over the credibility and robustness of the bonds’ linked sustainability targets, Snam reported strong demand for its net zero-linked offering, with the transaction 5x oversubscribed at an order book of approximately $10 billion.

The offering of the new bonds follows the publication by Snam in April of its Sustainable Finance Framework. Under the framework, the cost of servicing the debt of the bonds is linked to a series of emissions reduction targets, including reducing Scope 1 and 2 emissions by 25% by the end of 2027, 50% by the end of 2030, and 90% by the end of 2050, and reducing Scope 3 emissions by 35% by the end of 2032 and by 90% by the end of 2050. Snam said that the targets align with net zero across all scopes by 2050, with up to 10% of emissions covered through offsets.

The offering was structured in three tranches, including $750 million maturing in 2030, $750 million in 2035, and $500 million in 2055.

The offering also marked Snam’s debut in the U.S. capital markets, and increased the share of the company’s sustainable finance to 86% of total committed funding.

Snam CEO Agostino Scornajenchi said:

“As Snam consolidates its position as a national and pan-European infrastructural player, strengthening our presence in global capital markets becomes essential to support our long-term growth ambitions. The strong interest shown by US fixed-income investors, together with the broad US investor base in our shareholding, reaffirms the high confidence in Snam’s sustainable strategy, financial soundness and our long-term industrial vision.”