Iron-ore giant Fortescue Metals Group Ltd. sold $1.5 billion in bonds, including a stake earmarked to benefit the environment, the latest by its billionaire founder Andrew Forrest to pivot into a booming green market. Effort.
According to a person with knowledge of the matter, Australian miners sold their FMG Resources (August 2006) Pty Ltd. The unit tapped the US high-yield market with a two-part bond deal on Wednesday. The 10-year tranche is an $800 million green bond, which the person, who asked not to identify in details, said is private. This is the company's first such debt and the largest dollar-denominated green junk bond tranche since early December, according to data compiled by Bloomberg.
Proceeds from the first sale of Fortescue's green bonds will be used to finance or refinance new or existing eligible green projects – including renewable energy, energy efficiency, storage, clean ocean and coastal freight transport, in accordance with Fortescue's sustainability financing framework can be.
The green-bond market is exploding as governments and companies rush to raise funds to meet their sustainability goals amid pressure from investors and regulators. Last year, debt sales reached a record $513 billion, according to data compiled by Bloomberg. The Climate Bonds Initiative, a London-based organization that sets green-bond standards, forecasts annual sales could reach a new high of between $900 billion and $1 trillion by the end of this year – and $500 billion by 2025. up to 5 trillion.
It took the Perth-based billionaire – widely known in Australia as "Twiggy" – a little over a decade to build up an iron-ore empire to challenge major companies. Now he has set himself an equally ambitious timeline to become a global superpower in the field of clean energy. Fortescue, the world's fourth-largest producer of iron ore, has set a target of 2040 to reach net-zero greenhouse gas emissions from its steelmaking customers.
The ISS ESG Corporate Ratings, which provided a second-party opinion to Fortescue's framework in November, said the issuer pitted against a peer group of industry peers including mining as well as a single view on key environmental, social and governance issues. Shows high-stability performance. Production Sector.
Morgan Stanley, Citigroup Inc., Societe Generale SA and Credit Suisse Group AG managed the bond sales, the person said.