Grupo Bimbo’s Issues Largest Sustainability-linked Bond in Mexican Market

by | Jun 5, 2023

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A plate filled with Mexican baked goods.

(Credit: Canva Pro)

Grupo Bimbo, an international bakery company, said it has completed a successful issuance of sustainability-linked bonds (SLBs) in the Mexican market, which will go toward tackling the company’s Scope 3 emissions.

The company said it raised approximately $850 million, marking the largest corporate SLB in the history of the Mexican market, which is a significant milestone for sustainable financing in the region.

Grupo Bimbo and its Sustainability Goals

Diego Gaxiola, CFO of Grupo Bimbo, highlights the significance of the SLB issuance in aligning with the company’s long-term sustainability strategy. By introducing its first Environmental, Social, and Governance (ESG)-labeled bond, Grupo Bimbo reinforces its commitment to global sustainability objectives.

Grupo Bimbo’s SLBs are closely tied to its sustainability performance targets, particularly focusing on the reduction of carbon emissions. The company has identified Scope 3 emissions, which constitute approximately 90% of its carbon footprint, as a key area for sustainability efforts. The issuance received a second-party opinion, confirming the materiality and relevance of the Sustainability Performance Targets according to market standards.

Grupo Bimbo said the SLB is the fifth for Scope 3 emissions internationally and the first issued in Latin America.

Another objective behind Grupo Bimbo’s SLB issuance is to optimize fund allocation and enhance the company’s financial flexibility. The proceeds from the offering will also be used to repay bank debt, allowing Grupo Bimbo to streamline its financial obligations and strengthen its market position. By utilizing sustainable financing, Grupo Bimbo demonstrates a strategic approach to both financial and environmental stewardship, according to the company.

The company successfully secured the $850 million through two series of bonds with different maturities and interest rates. The first series, valued at around $680 million, has a 10-year maturity and a fixed annual rate of 9.24%, while the second series, totaling approximately $170 million, features a 3-year maturity and a floating interest rate. Financial institutions BBVA, HSBC, and Santander participated in the bond issuance.

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