Bonds

Our conventional debt securities (notes or bonds) mature in 2029,  with a principal value of US$ 500 million. They were issued at a coupon of 5.750% p.a. with interest payable semi-annually.

On April 4, 2019 – and additional to the issue of the notes maturing 2029 –, we repurchased US$ 238 million of the initial offering of the Notes maturing 2024 through a tender offer as disclosed in the ITR 2Q19*, page 87.

On July 8, 2019, we retapped the issue maturing in 2029 for an additional tranche of US$ 250 million, as per Notice to the Market*.

The buybacks are in line with the Company’s debt management strategy.

(*) Portuguese Only

A range of different eligibility  criteria has to be met for the issue of these securities in line with the four pillars which make up the Green Bond Principles – of the International Capital Markets Association (ICMA) -, and further attested to by Sustainalytics, as the Second Party Opinion (SPO) (see here).

The resources raised from these issues must be allocated to the financing and/or refinancing of all or part of investments and/or costs related to eligible “Green Projects”, these in turn being evaluated by Klabin’s sustainability governance organs.

In 2019, Klabin became the first Brazilian company to issue securities of this type with a thirty year maturity (Notes maturing 2049). These issues reinforce Klabin’s commitment and socio-environmental operations in Brazil,  reflecting its pioneering approach to sustainability practices.

On January 15, 2020, the Company retapped the  2049 Notes >issue for a further US$ 200 million according to the Notice to the Market attached*

(*) Portuguese Only

On  January 6, 2021, the Company disclosed in an Notice to the Market (attached*) that it had priced the issue of US$ 500 million in Senior Unsecured Notes with a full guarantee, linked to performance targets in Sustainability (KPIs – Key Performance Indicators) to be achieved by 2025 and aligned to the sustainable development goals outlined by the Company for 2030. Given this, the securities underlying this issue are subject to readjustments in the coupon should set sustainability goals not be met by the Company. The three KPIs linked to this issue are:

1. Consumption of water equal or lower than 3.68 m³ per ton of production, equivalent to a reduction of 16.7% compared with consumption reported for 2018;
2. A minimum of 97.5% of reuse/recycling of solid waste;
3. Release into the ecosystem of at least two types of indigenous species of animal threatened with extinction.

To access the Frameworkwith respect to the issue of Klabin’s Sustainability-Linked Bond, click here.

This issue has also been certified by Sustainalytics in the form of a Second Party Opinion (SPO) (see here).

(*) Portuguese Only