Cabot Corporation has announced the execution of its new $1 billion unsecured revolving credit facility. With this transaction, Cabot has replaced its existing $1 billion unsecured revolving credit agreement that was scheduled to mature in October of 2022, while adding a sustainability-linked pricing mechanism to the new agreement.
The Credit Agreement matures August 6, 2026, subject to two options to extend the maturity by one year, exercisable prior to the first and second anniversaries of the effective date of the Credit Agreement. Pricing for the facility is based upon the company’s credit ratings as well as its performance against annual intensity reduction targets for its sulfur dioxide (SO2) and nitrogen oxide (NOX) emissions. The deal is among the first sustainability-linked revolving credit agreements in the US chemical industry.
The Credit Agreement was entered into with a syndicate of lenders arranged by, JPMorgan Chase Bank, N.A. as Lead Left Bookrunner, Administrative Agent and Joint Lead Arranger, Citibank, N.A., as Joint Bookrunner, Joint Lead Arranger, and Syndication Agent, Mizuho Bank, LTD., TD Securities (USA) LLC., Bank of America, N.A., U.S. Bank, National Association as Joint Lead Arrangers and Co-Documentation Agents and Wells Fargo Bank, National Association as Co-Documentation Agent. J.P. Morgan Securities LLC and Mizuho Bank, LTD. also served as Co-Sustainability Agents.
Last year, BNP Paribas announced it closed a $100 million syndicated Revolving Credit Facility (RCF) structured as a sustainability-linked loan (SLL) with Empresas CMPC S.A. (CMPC), a Chilean pulp and paper company.
This was the first SLL for CMPC and the first for BNP Paribas in Latin America. It is also the first SLL RCF in Chile with comprehensive environmental Key Performance Indicators.
Also last year, WSP Global Inc. became the first professional services firm in the Americas to secure sustainability-linked terms for its syndicated credit facility. WSP signed an amendment to its existing credit facility to include financing terms that reduce or increase the borrowing costs on the lending facility as sustainability targets are met or missed.
The amendment introduced an annual pricing adjustment based on the achievement of ambitious targets related to sustainability. According to WSP, this step reflects the company’s goal to create compelling business value through advancing its vision to have a long-lasting positive impact on society.
