Korian will make care for seniors greener and more social
With the support of Societe Generale, Korian placed a Sustainability-Linked Euro PP for an amount of 173 million euros at eight years, associated with the achievement of three key indicators linked to its ESG performance.
Operating more than 850 establishments in six countries and with a turnover of 3.6 billion euros in 2019, Korian is the European leader in support and care services for the elderly. The Group has announced the success of its first Sustainability-Linked private bond placement (Euro PP), for an amount of 173 million euros and with a maturity of eight years.
A Sustainability-Linked bond issue provides that its cost of financing can vary depending on the issuer’s performance on its sustainable objectives. This operation is an extension of the 15 ESG (Environmental, Social and Governance) commitments made by Korian during the presentation of its latest annual results last February, around the business project "In caring hands", whose ambition is to create a positive impact for its customers, staff and stakeholders.
Korian has therefore decided, through the issuance of this Sustainability-Linked Euro PP, to link part of its long-term financing to the effective achievement of three of the main commitments made by the Group by 2023:
• the deployment of ISO 9001 certification across all its facilities in Europe;
• the doubling of staff members participating in qualifying training programs;
• the reduction of its direct and indirect carbon dioxide emissions.
Depending on the extent to which each of those targets are met, the interest rate on the notes may be increased or reduced by up to 20bp. If the interest rate is increased, half of the step-up will be allocated to internal compensatory measures and/or paid to one or more external partners (such as associations or NGOs), with the other half being paid to investors. Korian’s fulfilment of the commitments concerned will be checked annually by an independent third party when the Group’s Statement of Extra-Financial Performance is reviewed, said Korian in a press release.
This issue, subscribed by renowned investors, will allow Korian to diversify its funding sources while extending the duration of its maturity profile and will serve for general corporate purpose.
Societe Generale acted as Global Coordinator, Sustainability Structurer & Joint Bookrunner, which highlights the confidence placed by the Group in the Bank and its ability to execute innovative sustainable finance transactions, in line with issuers and investors’ current expectations.
This issue is the largest Sustainability-Linked Euro PP ever issued, which testifies to the success of Societe Generale's Euro PP franchise since the market was created in 2012, as well as investor support for Korian’s CSR policy. It is also the first one priced since the released of the Sustainability-Linked Bond Principles published by the International Capital Market Association (ICMA) in June 2020, thereby strengthening Societe Generale's status as a key player in sustainable and positive impact finance.
We were delighted to work with Societe Generale on this financing that is both innovative and ambitious, not only in its structure – the first sustainable financing in the sector – but also in its timing since the operation was managed during the lockdown. Societe Generale drove the project with this innovative approach as well as with efficiency. We were pleased with the level of appetite shown by the investors but also agreeably surprised by the interest generated by the financing on announcement.
We are delighted to have participated in the structuring of Korian's Sustainability-Linked Euro PP, fully in line with its CSR policy. Developed in a spirit of co-construction between the issuer and the investors, this transaction achieves an alignment of interest between Korian and its Euro PP lenders.
Co-Head Global Capital Markets, Societe Generale