Treasury Wine Estates opts for an SLL as part of its refinancing

  • By Zilla Efrat

Treasury Wine Estates (TWE) is using a sustainability linked loan (SLL) to help refinance its $1.4 billion debt facilities.

Supporting TWE with this initiative were BNP Paribas, HSBC and Westpac as joint sustainability coordinators.

In what it describes as a wine industry-first for the Asia-Pacific region, Westpac also acted as mandated lead arranger and bookrunner in establishing the SLL for TWE.

Through margin adjustments, the SLL incentivises TWE to meet several sustainability targets. These include achieving 100 per cent renewable electricity by 2024 to reduce greenhouse gas emissions; undertaking a comprehensive review of water usage and footprint at a catchment level in FY22; and having 50 per cent women in senior leadership and 42 per cent female representation overall by 2025.

“This is a significant step forward for TWE and leads the way for the industry,” says Nicholas O’Brien, managing director, consumer and industrials at Westpac Institutional Bank. “TWE has set ambitious, yet achievable, targets as it takes meaningful steps towards a more sustainable future.

“SLLs are an important and increasingly sought-after tool that allows organisations to align their financing and sustainability strategies. Many investors are attracted to investing in corporates that they see to have robust sustainability strategies.”

TWE’s chief financial officer Matt Young says: “Integrating our sustainability performance with our financing framework is a really important step for both our sustainability and capital market journeys, incentivising us to move even more quickly towards achieving our sustainability ambitions and targets.”

According to Westpac, SLLs have grown in popularity since the inaugural SLL was issued in April 2017, with the market further aided by the initial release of the Sustainability Linked Loan Principles in 2019. Globally, the value of SLL issuance in the year to November 2021 has exceeded the total value of SLLs in prior years since the inaugural transaction came to market in 2017.