Amazon plans to raise $ 1 billion through its first sustainability bond – update
By Dieter Holger
Amazon.com Inc. has issued its first sustainable bond, aiming to raise $ 1 billion to support environmental and social projects as investors demand more sustainable bonds to “green” their portfolios.
The Seattle-based e-commerce giant said Monday the bond proceeds will fund renewable energy, affordable housing, reduce resources used by buildings and help under-represented groups integrate into the workforce. technological through training. Investors have oversubscribed the sustainability bond, which matures in two years and yields 0.257%, an Amazon spokesperson said.
Amazon is targeting net zero greenhouse gas emissions in its direct and indirect operations by 2040 and rallied other large companies to target in the same year.
The bond has no special terms, but Amazon will use the net proceeds as soon as possible for green or social projects, although a funding breakdown for each project is not yet available, a spokesperson said. Later, companies often provide an update on how funds from green or sustainable bonds have been used.
Amazon ranks second among 18 publicly traded e-commerce companies for its handling of environmental, social and governance issues, including disclosures and programs, according to the Wall Street Journal’s ESG scores. EBay Inc. is currently number one in the e-commerce section of the rankings, which updates as new data becomes available.
Unlike climate change-focused green bonds, sustainable bonds are linked to both environmental and social efforts and have grown in popularity in recent years. Investors who wish to strengthen the sustainability profile of their holdings tend to oversubscribe in bonds.
At the end of last month, appliance maker Whirlpool Corp. said it closed its first $ 300 million sustainability bond, a 10-year note with a 2.4% interest coupon.
Loans that reward or punish companies with higher or lower borrowing costs if they meet their environmental and social goals continue to attract more corporate borrowers who want to strengthen their commitments. Beverage giant Anheuser-Busch InBev SA signed a $ 10.1 billion sustainability loan in February.
According to analysts, the growing number of net zero pledges from companies is expected to propel the sustainable debt market to record levels. The global market reached $ 2.2 trillion in the first quarter and could exceed $ 3 trillion this year, according to the Institute of International Finance.
In 2020, businesses and governments issued a record $ 732.1 billion in sustainable debt, including bonds and loans, a 29% increase from 2019, according to BloombergNEF, a data provider.
Goldman Sachs Group Inc., Bank of America Corp., Wells Fargo & Co., Morgan Stanley, HSBC Holdings PLC, JPMorgan Chase & Co., Citigroup Inc., Societe Generale SA, Deutsche Bank AG and TD Securities act as tenants book for Amazon’s Sustainability Commitment, the company spokesperson said.
Write to Dieter Holger at [email protected]
(END) Dow Jones News Wire