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S&P rates Nemak green notes BB+
S&P said it assigned BB+ issue-level and 3 recovery ratings (rounded estimate: 55%) to Nemak SAB de CV's planned sustainability-linked senior unsecured notes of up to $500 million.
“Under this bond, the company has established sustainability objectives, mainly to reduce greenhouse gas (GHG) emissions. Nemak's goal is to reduce GHG emissions by 28% by 2030 with a median target of 18% by 2026, compared with scope 1 and 2 GHG emissions of 1.4 million metric tons of carbon dioxide equivalent as of Dec. 31, 2019. Under a stressed scenario, where the company does not achieve the expected sustainability performance target in the proposed timeframes, this will result in an increased interest rate, which will be established on transaction completion,” the agency said in a press release.
The company will refinance its 4¾% senior unsecured bond due 2025 with an outstanding balance of $500 million, ahead of its maturity.
The outlook is stable.
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