Adidas has announced the successful placement of its first sustainability bond, whose offer was more than five times oversubscribed. The €500 million bond carries a 0.00 percent coupon and has a duration of eight years. It is divided into five equal tranches and will be listed on the Luxembourg Stock Exchange.
The proceeds from the bond will be used to fund environmental and social initiatives, through a framework that has been validated by an opinion from Sustainalytics. Available for consultation on the adidas-group.com website, the program calls for purchases of recycled materials, investments in renewable energy production and energy-efficient buildings, and initiatives to promote lasting change in under-represented communities.
Moody’s assigned an A2 debt rating to the bond, onthe basis of Adidas’ position in the market, its good liquidity, its long track record of sustainable product innovation and consumers’ increasing awareness of sustainability an an issue. It also reflects, among other points made by Moody’s, the company’s sizeable commitments to paying fixed sponsorship obligations and the challenges related to the turnaround of Reebok, notably in the U.S.
The rating agency affirmed its stable outlook for Adidas, predicting a gradual recovery in the company’s revenues over the next 12 to 18 months, with its credit ratings returning to their pre-pandemic levels by 2022.
Like Adidas, also VF Corp. and Moncler launched green eurobonds earlier this year, respectively for €500 million and €400 million.