World's Largest Salmon Producer Inks €2.6bn Green Loan Deal
- The company structures 100% of its debt to be green or sustainable.
- The interest rate is tied to targets set around ESG performance.
- There is a provision for a multicurrency facility.
Norway's Mowi ASA, the world's largest producer of Atlantic salmon, has signed a €2.6 billion sustainability-linked revolving credit facility deal with seven top financial institutions.
The credit facility will allow Mowi, also one of the largest seafood businesses in the world, to borrow, repay, and borrow again over the course of five years, which increases flexibility in managing its finances.
The company can also increase the facility by €400 million if needed.
A sustainability-linked loan means Mowi will pay an interest rate contingent on its performance against environmental, social, and governance (ESG) targets, meaning it will pay more interest if the targets are not met and less if they are met.
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This financial arrangement will help the business stay on track with its sustainability goals and align financial incentives with its environmental and social responsibilities.
The seven top banks involved in this deal are DNB, Nordea, Rabobank, ABN AMRO, Danske Bank, SEB and Crédit Agricole.
The latest financing agreement will replace the Norwegian firm's existing credit facilities or older debt, as well as fund its day-to-day operations and future investments. The company decided to structure 100% of its debt around ESG principles.
An important proviso with the loan is that it must keep a minimum equity ratio of 35%. This means that a minimum of 35% of its capital should come from shareholders instead of borrowed money.
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Another feature of the agreement is a provision for multicurrency, not just in euros, which is really useful for global businesses.
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