Insight & Analysis

Press Release: Luxury clothes maker Burberry plans GBP Sustainability Bond

Published: Sep 2020

9th September 2020 – Burberry Group plc (‘Burberry’ or the ‘Company’) announces its intention to issue a benchmark-sized, medium-dated, sterling public Sustainability Bond (the ‘Bond’).

Newspaper press release

This will be the first sustainability labelled bond issued by a luxury company and will diversify Burberry’s sources of funding, introducing long-term financing into the Company’s capital structure.

Burberry has applied to be rated by Moody’s and expects the Bond to be rated Baa2 (Stable Outlook).

The Bond will be issued pursuant to the Company’s Sustainability Bond Framework, which has received a ‘second party opinion’ from Sustainalytics.

The proceeds will be used to finance and/or refinance eligible sustainable projects as described by Burberry’s Sustainability Bond Framework. Burberry has a longstanding commitment to sustainability and is dedicated to using its position and influence to drive social and environmental improvements.

The Company has a conservative capital allocation policy and already holds substantial liquidity. Following the outbreak of COVID-19, earlier in the year the Company drew down its £300 million Revolving Credit Facility (the ‘RCF drawings’) and issued £300 million of short-dated commercial paper under the Bank of England’s Covid Commercial Financing Facility (‘CCFF’), with a maturity in March 2021 (together, the ‘Debt Facilities’). The RCF drawings were repaid in full in the first quarter of FY 2020/21.

The Bond will rank pari passu with the Debt Facilities. The Bond will be guaranteed by the Burberry group entities which also guarantee the £300 million Revolving Credit Facility.

The Bond will be offered to professional investors and eligible counterparties. Applications will be made for the admission of the Bond to be listed on the Official List of the UK Listing Authority and to be traded on the Main Market of the London Stock Exchange.

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