Saturday, September 23, 2023

HL advises CBC on $1.1bn first bottler sustainability-linked bond

Hogan Lovells cross-border team has counselled The Central America Bottling Corporation on the first USD sustainability-linked bond by a bottler in the Americas


Global law firm Hogan Lovells advised long-time clients The Central America Bottling Corporation CBC Bottling Holdco, S.L., and Beliv Holdco, S.L., as co-issuers in connection with a Rule 144A and Regulation S offering of US$ 1.1 billion aggregate principal amount of the Co-Issuers’ 5.250 percent Senior Guaranteed Sustainability-Linked Notes due 2029 and a successful concurrent tender offer and consent solicitation relating to, and subsequent redemption of, CBC’s outstanding 5.750% Senior Guaranteed Notes due 2027.

Citigroup Global Markets Inc. and J.P. Morgan Securities LLC served as initial purchasers in connection with the Offering and dealer managers in connection with the Tender Offer and Consent Solicitation.

The offering, which was the first US dollar-denominated sustainability-linked bond in the international markets from a bottling company in the Americas, positions CBC at the forefront of the industry’s decarbonization strategy and in the development of the circular economy in those countries in which it operates. The offering is also the first sustainability-linked bond by a Central American issuer and the second-largest single tranche SLB by a Latin American issuer ever.

The offering reaffirmed CBC’s commitment to its sustainability goals by adding a “skin-in-the-game” feature linked to two material, core and relevant Sustainability Performance Targets embedded in the new SLB. Moreover, the Company believes that the SLB exemplifies CBC’s strong commitment to making a positive impact in the world by integrating certain ESG dimensions to respond to numerous challenges that Latin America is facing and ultimately to generate prosperity for the entire region.

The deal, which reduced CBC’s overall cost of debt while simultaneously extending its maturity profile, underscores CBC’s strong credit profile and appeal to a wide investor base including US HG, EM, and ESG-focused investors.

Hogan Lovells cross-border team was led by partners Ben Garcia (New York) and Jorge Diaz-Silveira (Miami), with senior associate Meredith Hines (New York), international consultant Pedro Martinez (Miami), and associate Ernesto Sanz (Miami). Advising on the tax aspects of the deal was Washington, D.C., partner Scott Lilienthal.

In Madrid, the team included partner Juan Garicano and counsel Alejandro González, with senior associates Alejandro Moscoso del Prado and Carlos Meijide, and associates María Santana and Laura Wouters.

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