Brazilian cosmetics group Natura concluded on Monday (May 3) an international fundraising of US$1 billion in bonds linked to sustainability goals. The issue was carried out by its subsidiary, Natura Cosméticos S.A. with Natura & Co Holding S.A. acting as the guarantor.
The seven-year notes mature on May 3, 2028 and carry an interest coupon of 4.125% per year, to be paid on a half-yearly basis. The offer was the single largest Sustainability Linked Bond (SLB) issuance to date in Latin America.
The Ba2/BB/BB rated company and the world’s fourth beauty group, will use the funds to refinance existing debt, in line with the group’s liability management plan to improve its capital structure.
Commenting on the conclusion of the fundraising, Roberto Marques, Executive Chairman and Group CEO of Natura &Co, stated:
“The successful raising of US$1 billion in bonds linked to sustainability targets is a milestone for Natura &Co and for Natura, and is the largest-ever single issuance by a Brazilian issuer. The strong demand for the securities is a recognition by the market of the Group’s solid capacity to deliver social, environmental and financial results. Natura already has a long and consistent history of commitment to sustainability and is now taking a further step connecting and aligning financial and environmental targets.”
Bank of America and HSBC advised the company on its sustainability-linked structure. Bradesco, Citi, Itau and Morgan Stanley acted as joint bookrunners. Since 2007, Natura has been a carbon neutral company. In addition, the company has also been making a series of efforts to reduce its relative emissions, which fell 33% between 2007 and 2013, and an additional 11% through 2020, a year when Natura posted net revenues of R$ 36.9 billion.
A key highlight of the last quarter of 2020 was the strengthening of Natura &Co’s capital structure with the completion in October of a $1 billion capital raise. This allowed the group to significantly deleverage its balance sheet, and it ended 2020 with a net debt to EBITDA ratio of 0.97 times.
Founded in 1969, Natura is a global, purpose-driven, multi-channel and multi-brand cosmetics group which includes Avon, Natura, The Body Shop and Aesop.
Established in New York, the 135-year-old Avon is a direct sales company in beauty, household, and personal care categories. Since 1886, Avon offered women the rare opportunity to earn their own money 34 years before women in the U.S. won the right to vote.
The Body Shop, founded in 1976 in Brighton, England, by Dame Anita Roddick, is a global manufacturer and retailer of naturally inspired, ethically produced beauty and cosmetics products.
The Australian beauty brand Aesop was established in Melbourne in 1987 and has set itself the goal of creating a range of products of the highest quality for skin, hair and body.
The four companies that form the group are committed to generating positive economic, social and environmental impact.
The Brazilian group joined Mexican conglomerate Femsa which became the first issuer from the Americas to sell a sustainability-linked bond (SLB) in euros last month. In April, Mexican auto parts company Metalsa also sold $300 million worth of 10-year sustainability-linked bond (SLBs) in its second excursion to the international bond market.
Natura became a public company in 2004, when its shares were listed on São Paulo Stock Exchange (B3). On January 6, 2020, Natura began trading on the New York Stock Exchange (NYSE).
