Valeo has raised green bonds in private placement, for gross proceeds of EUR600 million (USD631.57 million).
According to GlobalData’s deals database, the European Investment Bank (EIB) has subscribed in the amount of EUR150 million in the first ever green bond issued by Valeo.
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The bonds bear a coupon rate of 5.875% per annum and will mature after 5.5 years.
Valeo says the green bond will enable it to continue to expand its portfolio of technologies that contribute to low-carbon mobility, in particular its solutions for vehicle electrification.
A key feature of the bond set-up is the establishment of a pioneering green and sustainability-linked financing framework covering both reporting, governance and verification, which Valeo has put in place to guarantee the funds are applied solely to activities which satisfy the EU Green and Sustainability Taxonomy. These include projects related to both production systems and the introduction of new technology in categories including clean transportation, renewable energy, energy efficiency, sustainable water and waste water management, and circular economy.
Valeo has so far identified a pipeline of around EUR2bn of eligible projects. Examples include smart heat pumps, battery terminal management systems, electric motors, and compact and quiet front-end cooling modules.
The European Investment Bank (EIB) is a long-term partner of Valeo’s, having provided a total of EUR750m in funding for investments into technologies designed to reduce carbon emissions and improve active vehicle safety since 2020.
The green bond financing offer complements the EIB’s existing long-term bank loan offering.
Th green bond, a first for the EIB in France, should also help attract long-term financing on the public debt markets for green investments.
Credit Agricole CIB acted as Sole ESG structuring advisor, BNP Paribas and Credit Agricole CIB acted as joint global coordinators, and with Citi, MUFG, Natixis and Societe Generale acted as joint active bookrunners in the transaction.
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