Evonik successfully issues the first green hybrid bond

On August 26, Evonik Industries AG successfully issued the first green hybrid bond with a denomination of 500 million euros
.
The bond is the specialty chemicals company’s first green financial bond issuance and follows the launch of Evonik’s Green Finance Framework on August 24, 2021, which integrates sustainability more closely into Evonik’s financial strategy
.

As a globally active specialty chemicals company, responsibility and long-term economic success are two sides of the same coin
.
Sustainability has become a growth driver for Evonik
.
The demand for products with market-leading sustainability benefits (next-generation solutions) is developing dynamically
.
Therefore, most of the proceeds will be used to fund investments in next-generation solutions
.
These include, for example, biosurfactants, sustainable food packaging, innovative insulating materials and gas filtration membranes
.
Evonik plans to further increase the proportion of sales it generates in next-generation solutions from the current 35% over the next few years
.

At the same time, Evonik will further reduce its own ecological footprint
.
To this end, companies continuously invest in processes throughout the value chain
.
Proceeds from green hybrid bonds help Evonik minimize its own resource requirements, for example through financing initiatives to reduce its own CO2 footprint
.

“Evonik aims to be a premier specialty chemicals company, and our 2020+ Sustainability Strategy reflects that aspiration
.
With the release of our Green Finance Framework and this Green Hybrid offering, we reflect our Strong commitment to sustainability and financing," said Ute Wolf, Chief Financial Officer of Evonik
.

Investors of Evonik Mixed Capital have attractive investment opportunities with a focus on sustainable development
.

The green hybrid bond was significantly oversubscribed, arousing strong interest from institutional investors
.
Evonik benefits from its good debt capital market reputation, attractive sustainable image and favorable market environment
.

Green hybrid bonds are officially valid for 60 years
.
Evonik has the first redemption right in 2026, followed by other financial liabilities
.
In addition to the new green hybrid bonds, Evonik announced on August 24, 2021, an offer to acquire its outstanding €500 million hybrid bonds with an annual interest rate of 2.
125%
.
The results of the tender offer will be announced on September 2, 2021
.

By combining the issuance of new green hybrid bonds with a repurchase offer, Evonik can refinance its outstanding hybrid bonds at an early stage and provide current investors with an attractive opportunity to invest in Evonik's hybrid bonds.
Capital is reinvested with a focus on sustainability
.
The Green Hybrid Bond has an annual interest rate of 1.
375%
.
This resulted in annual interest savings of €3.
8 million compared to repurchased hybrid bonds
.

Evonik Industries AG is rated Baa2 and BBB+ by Moody's and Standard & Poor's, respectively, with a stable outlook
.
Ba1/BBB - Hybrid bond ratings, as is typical for these instruments, are two notches lower than corporate ratings
.
Consistent with the hybrid bond issued in 2017, the new green hybrid bond is structured such that both rating agencies value 50% as equity capital
.

In the issuance of the green hybrid bond, Bank of America Securities acted as advisor to the hybrid structure and Citigroup acted as advisor to the green structure
.
Other joint bookrunners are BNP Paribas, HSBC and UniCredit
.
BNP Paribas, BofA Securities and Citigroup also acted as dealer managers for the tender offer
.