Latin America Sustainable Bond Market - Corporates - Sustainable Fitch
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Corporates
Cross-Sector
Latin America
Latin America Sustainable Bond
Market
A Growing Presence
Special Report │ July 14, 2021 fitchratings.com 1
Corporates
Cross-Sector
Latin America
Latin American Sustainable Bond Market
A Growing Presence
Sustainable bonds became a growing presence across Latin
“Sustainability-linked notes gained traction in American cross-border issuers in recent years, and Fitch Ratings
expects continued growth as market participants increase their
the Latin American cross-border issuer market awareness of and interest in Environmental, Social and Governance
since 2020. Fitch expects green, social, (ESG) factors.
sustainability and sustainability-linked This report explains the evolution of sustainable bonds issued by
markets to continue to increase in the region.” cross-border LatAm corporates, and analyzes the distribution
across ratings, countries and sectors. It also includes the benefits,
Fernanda Rezende, Fitch Ratings
challenges and concerns of the growing Green, Social, Sustainability
and Sustainability-linked (GSSS) market. The report summarizes 22
sustainability and sustainability-linked notes, listing their specific
terms and conditions.
Sustainable Bonds in Latin America
Sustainability-linked notes have been increasingly issued in Latin
America since 2020 and the momentum of the GSSS market
continues. Sustainable bonds represented 5% of total nonfinancial
corporate cross-border bond issuances during 2020, with USD4.1
billion of issuance activity. These bonds represented 30% of LatAm
issuance YTD through July 2021, totalling USD12.1 billion in total
issuances.
Brazil is the largest sustainable bond-issuing country within Latin
America, representing 52% of GSSS issuances in the region. Mexico
is the second largest. Other countries, such as Chile, Argentina,
Colombia, Guatemala, Panama and Peru, still have low sustainable
bond volumes.
Diversification across sectors improved since 2019. Pulp & Paper,
Food & Beverage and Energy were the only sectors with presences
in the sustainable market up to 2018. After 2019, new sectors, such
Related Research as Auto & Related, Technology, Chemicals, Telecom, Consumer,
ESG Credit Quarterly - 1Q21 (May 2021) Real Estate, Transportation, and Sugar & Ethanol, accessed the
Latin American Comparative Statistics Book: 2021 (Five Years of sustainable market.
Credit Metrics of 220 Corporate Cross-Border Issuers)
(May 2021)
LatAm Sovereign Green, Social, and Sustainable Issuance Is
Growing: March 2021 (March 2021)
Analysts
Fernanda Rezende
+55 21 4503-2619
fernanda.rezende@fitchratings.com
Natália Brandão
+55 21 4503-2631
natalia.brandao@fitchratings.com
Special Report │ July 14, 2021 fitchratings.com 2Corporates
Cross-Sector
Latin America
Sustainable Bonds in Latin America Global Sustainable Bonds Evolution
Green Bond Social Bond
Latin America’s first green bond was issued in 2014 by the Peruvian Sustainability Bond Sustainability-Linked Bond
energy company Energia Eolica, S.A., followed by the Brazilian (USD Bil.)
protein company BRF S.A. in 2015. About USD22.5 billion was 700
600
issued by LatAm companies in the GSSS bond market since 2014.
500
LatAm corporates bond issuances totaled USD89 billion in 2020 400
and USD40 billion YTD July 2021, USD4.1 billion and 300
USD12.1 billion of which, respectively, were green, sustainability 200
100
and sustainability-linked bonds. Sustainable bonds were only about
0
5% of total corporate bond issuances in 2020, which significantly 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
increased to 30% YTD July 2021.
Source: Fitch Ratings, Environmental Finance Bond Database.
This growth was driven by the surge of the sustainability-linked
bonds in the region, which represented 81% of GSSS bonds issued Sustainability-Linked Notes
YTD July 2021 and is expected to continue increasing, supported by Sustainability-linked notes gained momentum in Latin America
investor and issuer awareness for improved ESG practices. since 4Q20. Suzano S.A. was the first company in the region to issue
Sustainability-linked bonds should remain an important driver in its USD1.25 billion sustainability-linked notes in September 2020,
the LatAm market. and 16 new issuances were concluded YTD July 2021.
Global GSSS issuances totaled about USD610 billion in 2020, with Sustainability-linked notes significantly increased to USD9.8 billion
an increase in social and sustainability bonds. Corporates YTD July 2021, from only one issuance of USD1.25 billion in 2020.
represented about 27% of the total market. Social bonds were not About USD9 billion of sustainability-linked notes were issued
issued by LatAm nonfinancial corporates, differing from global globally in 2020.
trends. Ecuador is the only country in the region that issued a
sovereign social bond. Sustainability-linked notes are aligned with the issuer’s
performance compared with relevant predetermined sustainability
Chile is the only sovereign in the region to issue green bonds, the targets. The notes incentivize borrowers to establish
first of which was in June 2019, equivalent to USD7.4 billion in predetermined sustainability performance targets (SPTs), including
issuance to date. Mexico issued the world’s first sustainable bond key performance indicators (KPIs) and external valuation, among
(EUR750 million), linked to the UN’s Sustainable Development others.
Goals. Ecuador issued the first sovereign social bond
(USD400 million), with proceeds used to finance affordable urban There is a large variety of SPTs. Categories may include women in
housing. However, GSSS issuance remains a small part of total management positions, energy efficiency, renewable energy,
sovereign external bond debt, with a total of 22 governments greenhouse gas emissions, circular economy, water and
issuing GSSS bonds globally. wastewater management, waste management, green buildings,
biodiversity conservation, climate change, pollution prevention and
LatAm Corporate Offshore Sustainable Bonds by Type control, among others.
Green Bond Sustainability-Linked Bond Sustainability Bond
In Latin America, SPTs vary across issues. Examples include reduced
(USD Mil.) greenhouse emissions; water consumption, waste reduction, reuse
14,000 and recycling; reintroduction and/or reinforcement of wild species
12,000 into the ecosystem; reduce industrial water use intensity; and
10,000
renewable energy.
8,000
6,000 Interest rates will step up for the majority of recent sustainability-
4,000 linked notes issued by LatAm corporate issuers if the company fails
2,000 to meet the SPTs within a specific time frame. Interest step ups
0
ranges between 6.25bps and 25bps for LatAm issuances. Natura
2014 2015 2016 2017 2018 2019 2020 2021
YTD Cosmeticos S.A. was the only LatAm company to establish a higher
Source: Fit ch Rat ings, Bloomberg. interest step up of 65bps.
Sustainability-linked notes broaden the scope of eligible issuers, as
the debt instruments provide opportunities to companies with
lower green/sustainable investments and those that are less capital
intensive.
Special Report │ July 14, 2021 fitchratings.com 3Corporates
Cross-Sector
Latin America
The sustainability-linked notes have no ring-fencing for the use of resources and land use, biodiversity conservation, clean
proceeds and can be used for general corporate purposes, which is transportation, water and wastewater management, climate
an advantage compared with green bonds that need to be used change, circular economy and green buildings, among others.
toward green projects or activities that promote climate change
mitigation or adaptation, or other environmental sustainability LatAm Corporate Green Bonds
purposes. Another advantage is the cross-sector appeal, as no (USD Mil.)
specific project is required.
3,000
Sustainability-Linked Bond Principles aim to promote the
2,500
development and preserve the integrity of the sustainability-linked
2,000
market. They are based on five core components:
1,500
• Selection of KPIs: Relevant and material to the issuer’s 1,000
business; quantifiable, verifiable and able to be 500
benchmarked. 0
2014 2015 2016 2017 2018 2019 2020 2021
• Calibration of SPTs: Comparable with a benchmark, YTD
consistent with the issuer’s ESG strategy and established on Source: Fit ch Rat ings, Bloomberg.
a predefined timeline.
Sustainability Bonds
• Bond characteristics: Should include a triggering event that
Latin America’s sustainability bond market is still relatively small,
affects financial and/or structural characteristics, based on
totaling about USD3 billion since the first issuance in 2019. Two
the achievement of SPTs.
issuances by first-time issuers MercadoLibre, Inc. and Amaggi
• Reporting: Publish information on KPIs, verification Luxembourg International S.a r.l. totaled USD1.15 billion in 2021.
assurance reports and information that permits investors to
Proceeds from sustainability bonds finance projects are dedicated
monitor the level of ambition of the SPTs.
to environmentally sustainable outcomes, including green and
• Verification: Annual post-issuance verification from a social activities.
qualified external reviewer.
Sustainability bonds are a form of green bonds and have many
LatAm Corporate Sustainability-Linked Bonds categories eligible for green and social projects. Categories include
land conservation and preservation, renewable energy, access to
(USD Mil.) finance, clean transportation, circular economy, energy efficiency,
green buildings, waste reduction, socioeconomic advancement and
12,000
empowerment through education, among others.
10,000
8,000 Sustainability bonds usually follow the guidelines provided by the
6,000 Green Bond Principles, Social Bond Principles and the Sustainability
4,000 Bond Guidelines.
2,000 LatAm Corporate Sustainability Bonds
0
2020 2021 YTD
(USD Mil.)
Source: Fit ch Rat ings, Bloomberg.
2,000
Green Bonds 1,500
LatAm companies issued about USD8.5 billion of green bonds since
1,000
2014. Almost USD3 billion was issued in 2020 and USD1.2 billion
YTD July 2021, illustrating a reduction in the pace of green bond 500
issuance as sustainability-linked notes increased.
0
Green bonds differ from sustainability-linked notes that permit 2019 2020 2021 YTD
proceeds to be used for general corporate purposes, and focus on
Source: Fitch Ratings, Bloomberg.
the use of proceeds that are exclusively applied to finance new
and/or existing eligible green projects. Reporting and transparency
are required to track the use of funds into environmental projects.
Main Challenges and Concerns
Green Bond Principles established guidelines for disclosure, The growth of the GSSS market raises challenges and concerns. The
accuracy and transparency, assisting investors in evaluating the development of the GSSS bond market is required to maintain
consistency across the globe. Increased information transparency,
environmental impact of investments.
framework standardization, and taxonomic development and
Many categories are eligible for green projects, including energy improvement are priorities for the GSSS bond market.
efficiency, renewable energy, pollution prevention and control,
environmentally sustainable management of living natural
Special Report │ July 14, 2021 fitchratings.com 4Corporates
Cross-Sector
Latin America
Investors are assessing how companies set ESG targets, which
could ultimately affect financing.
Distribution Across Ratings
Credit ratings are not affected by whether a bond is GSSS or not.
Framework regulation and standardization will continue to evolve.
Different jurisdictions own their own taxonomies and the Common Latin American investment-grade companies issued about
Ground Taxonomy effort led by the International Platform on USD2.1 billion from 2014 to 2018, representing 66% of the GSSS
Sustainable Finance aims to enhance transparency regarding what bond issuances in that period. Non-investment-grade companies’
is commonly green and to scale up cross-border green investments. participation in the GSSS market increased since 2019. Investment-
grade GSSS issuances stayed on that path with issuances amounting
The core components of the EU’s taxonomy are: USD10.4 billion, but went down to 54% of total sustainable
• Substantially contribute to at least one of the six issuances from 2019 to YTD July 2021. Non-investment-grade
environmental objectives: climate change mitigation; corporates issued USD8 billion in the GSSS market since 2019.
climate change adaptation; water and marine resources; The first time non-investment grade issuers successfully debuted in
circular economy; pollution prevention and control; and the sustainable bond market was in 2021. MercadoLibre’s
biodiversity and ecosystems. USD400 million sustainability bond, Natura’s USD1 billion
• Do no significant harm to any of the environmental sustainability-linked notes, Amaggi’s USD750 million sustainability
objectives. bond, Simpar S.A.’s USD625 million sustainability-linked notes,
Movida Participacoes S.A.’s USD500 million sustainability-linked
• Comply with minimum safeguards. notes, Iochpe-Maxion S.A.’s USD400 million sustainability-linked
Reporting, maintaining a database and standardization of notes, Investment Energy Resources Limited’s USD700 million
disclosures are also important challenges. Investor and issuer green bond and Inversiones Latin America Power Ltda.’s
confidence will improve, supporting more climate and social USD404 million green bond were all issued this year.
liabilities. Latam Corporate Offshore Sustainable Bonds by Rating
Benefits Invest ment Grade High Yield Not Rated by Fitch
Sustainable bonds established a presence with Latin America’s
cross-border issuers in recent years and Fitch expects continued 2019–2021 YTD
growth as market participants increase their awareness of and
interest in ESG. Recent issuances in Latin America reported very
strong demand, with bonds oversubscribed.
2014–2018
The financial market plays an important role in redirecting capital
toward sustainable activities, including the transition to a low-
0 20 40 60 80 100
carbon economy and more equal society. Investors are placing (%)
greater scrutiny on ESG issues from risk, return and impact
Source: Fit ch Rat ings, Bloomberg.
perspectives, and will continue to demand actions to mitigate ESG
risk exposure. LatAm Corporate Offshore Sustainable Bonds by Rating
Issuance of GSSS bonds can improve investor base diversification, A A– BBB BBB– BB+ BB BB– Not Rated by Fitch
given differences in the investor base compared with conventional (USD Mil.)
bonds. Fitch expects sustainable funds to increase in the near term 14,000
in response to higher investor demand. ESG considerations, 12,000
including topics such as climate change, should gain importance in 10,000
financial institutions’ compliance and credit policies, which may 8,000
create barriers for issuers with weak ESG practices. 6,000
4,000
Companies are also implementing remuneration linked to 2,000
sustainability targets, demonstrating clear strategies toward new 0
practices and policies. 2014 2015 2016 2017 2018 2019 2020 2021
YTD
There is still a mixed view of benefits on pricing. Tighter pricing of Source: Fit ch Rat ings, Bloomberg.
GSSS bonds compared with equivalent conventional bonds (or
greenium) resulted from strong demand in many cases, although Distribution Across Countries
the subject is in debate given the difficulty of comparing like-for- Latin America accounts for a small portion of the global sustainable
like bonds. Companies unable to disclose ESG practices or deemed bond market. Global GSSS issuances totaled about USD610 billion
to have poorly managed ESG issues are increasingly likely to face in 2020, with Latin America representing only 3% and Latin America
financing challenges in the long term. nonfinancial corporates less than 1%.
Special Report │ July 14, 2021 fitchratings.com 5Corporates
Cross-Sector
Latin America
The largest global issuing countries in the International Capital LatAm Corporate Offshore Sustainable Bonds by Country
Market Association (ICMA)-aligned green bond market in 2020 (2014–July 2021)
Argentina
were the U.S., France and Germany. France, the U.S. and Japan were Peru
Guatemala
2%
3%
the largest issuing countries in the social bond market, while the 4%
Panama
1%
U.S., the Netherlands and France were the largest for the Colombia
Chile
sustainability bond market. 13%
1%
Mexico
W orld Sustainable Bonds at a Glance —2020 24%
Green Bond Social Bond
Sustainability Bond Sustainability-Linked Bond
Brazil
LatAm NFC
52%
Offshore
Source: Fit ch Rat ings, Bloomberg.
LatAm
Distribution Across Sectors
World
Renewable energy is the largest sector in the GSSS global market.
0 100 200 300 400 500 600 700 Pulp & Paper was the most active sector in the LatAm sustainable
(USD Bil.) market, representing about 33% of cross-border corporate
NFC – Non-financial corporat es. issuances from 2014 to YTD July 2021. The Food & Beverage sector
Source: Fit ch Rat ings, Bloomberg, Environment al Finance. was the second largest, with 22%, followed by Energy at 12% and
Auto & Related at 8%. Renewable energy is very active in the local
Brazil is the largest issuing country for sustainable bonds within
regional markets.
Latin America. Brazilian companies issued USD11.8 billion since
2014, representing 52% of GSSS issuances in the region. Mexico Diversification across sectors increased since 2019. Pulp & Paper,
was the second largest, with USD5.4 billion issued in 2020 and YTD Food & Beverage and Energy were the only segments with a
July 2021. Other countries still have low volumes of sustainable presence in the sustainable market until 2018. New sectors, such as
bonds, with Chile at USD2.9 billion; and Argentina, Colombia, Auto & Related, Technology, Chemicals, Telecom, Consumer, Real
Guatemala, Panama and Peru at less than USD1.0 billion each. Estate, Transportation, and Sugar & Ethanol accessed the
Fitch expects a green local market to be developed, to diversify sustainable market after 2019.
funding sources and increase credit availability. Local corporate New issuers entered the GSSS market in 2021, taking advantage of
sustainable issuances in Brazil totaled about USD6.5 billion since the characteristics of the sustainability-linked notes.
2016, about 77% of which was issued in 2020 and 2021. Energy was
the largest sector for local issuances, representing about 34% of the LatAm Corporate Offshore Sustainable Bonds by Sector —
total. Historical
Aut o & Relat ed Chemicals Consumer Energy
The local sustainable market for nonfinancial corporates in Mexico Food & Beverage Pulp Real Est at e Sugar & Ethanol
is still relatively small, with about USD650 million issued since Technology Telecom Transport ation
2017. Chile issued about USD500 million, and Colombia and Peru (USD Mil.)
issued about USD100 million each. 15,000
LatAm Corporate Offshore Sustainable Bonds by Country 10,000
—Historical
Argent ina Brazil Chile Colombia 5,000
Guatemala Mexico Panama Peru
(USD Mil.) 0
2014 2015 2016 2017 2018 2019 2020 2021
14,000 YTD
12,000 Source: Fit ch Rat ings, Bloomberg.
10,000
8,000 LatAm Corporate Offshore Sustainable Bonds by Sector
6,000 (2014–July 2021)
4,000 Sugar &
2,000 Real Estate Auto & Related Et hanol Technology
3% 8% 3% 2%
0
Telecom
2014 2015 2016 2017 2018 2019 2020 2021 Consumer 1%
YTD 4% Transportation
Source: Fit ch Rat ings, Bloomberg. Chemicals 7%
5%
Energy
12% Pulp
33%
Food &
Beverage
22%
Source: Fit ch Rat ings, Bloomberg.
Special Report │ July 14, 2021 fitchratings.com 6Corporates
Cross-Sector
Latin America
Appendix A — ESG Relevance Score Relevance to Issuer Portfolio
Fitch’s ESG Relevance Scores provide a comprehensive and credit- High Impact
focused approach to each sector and issuer. The main focus is to Medium 4%
Impact
assess whether ESG risks are relevant and material to the credit 33%
rating decision.
ESG Relevance Scores were built from an issuer-by-issuer scoring
process across our entire public corporate rating portfolio on the
international scale. In Latin America, 206 issuers were analyzed.
Low Impact
ESG risks generally have a low level of direct impact on credit 63%
ratings (less than 5%), and the impact is heavily asymmetric on the
Source: Fitch Ratings.
downside.
On our ‘1’–‘5’ Relevance scale, Relevance Scores of ‘1’–‘2’ indicate ESG Elements Driving Issuer Credit Impact a
no impact on the credit rating, either due to the topic’s irrelevance Medium Impact High Impact
to a sector or to the entity within the sector. Relevance Scores of ‘3’ (No.)
indicate a minimal risk impact from the issue or effective 80 73
management of the topic by the issuer to ensure no or low credit 70
impact. 60
50
Relevance Scores of ‘4’ and ‘5’ indicate the ESG risk is either an 40
22
30
emerging risk or contributing factor to the credit decision, and was 20 13 13
therefore a debate point at committee, or — in the case of a ‘5’ — a 10 0 0
0
risk that drove a rating change by itself.
Environment al Social Governance
aChartcount s t he number of element s scoring '4' or '5' in each cat egory.
ESG Scoring Definitions
Source: Fit ch Rat ings.
Lowest Relevance Neutral Credit-Relevant to Issuer
All ESG Elements —Total Overall Scoring Distributiona
1 2 3 4 5 1 2 3 4 5
Irrelevant Irrelevant Minimally Relevant to Highly
to the to the relevant to rating, not relevant, a
entity entity rating, a key key rating Governance
rating and rating but either very rating driver that
irrelevant relevant to low impact driver but has a
Social
to the the sector. or actively has an significant
sector. managed in impact on impact on
a way that the rating the rating Environmental
results in in combi- on an
no impact nation with individual
0 20 40 60 80 100
on the other basis.
entity factors. (%)
aTable aggregates all 14 underling scores of each issuer rated.
rating.
Source: Fitch Ratings.
Source: Fitch Ratings.
In Latin America, a ‘5’ Relevance Score indicating a clear and direct
change to a rating only applied to one or more ESG risks in the case
of 4.4% of issuers, compared with 2.1% globally. However, about
37% of issuers featured at least one Relevance Score of either ‘4’ or
‘5’, meaning ESG risk was a factor having some level of influence on
the rating decision.
The dominance of Governance Risk within the scoring accounted
for more ‘4’ and ‘5’ scores than the other two categories combined.
The most affected LatAm issuer sectors are Retail, Consumer,
Healthcare, Real Estate and Construction, and Natural Resources.
Special Report │ July 14, 2021 fitchratings.com 7Corporates
Cross-Sector
Latin America
Appendix B — Latin America GSSS Bond Issuances
Latin America Non-Financial Corporates Offshore Sustainable Bonds
Amoun
t Issued
(USD Coupon Date of
Issuer Name Type Country Currency Mil.) (%) Issuance Maturity Rating Sector
Energia Eolica, S.A. Green Peru USD 204 6.00 12/18/14 8/30/34 BBB– Energy
2014 204
BRF S.A. Green Brazil EUR 563 2.75 6/3/15 6/3/22 BB Food, Beverage
& Tobacco
2015 563
Suzano Austria GmbH Green Brazil USD 700 5.75 7/14/16 7/14/26 BBB– Pulp
2016 700
Fibria Overseas Finance Ltd. Green Brazil USD 700 5.50 1/17/17 1/17/27 BBB– Pulp
Inversiones CMPC Green Chile USD 500 4.38 4/4/17 4/4/27 BBB Pulp
Klabin Finance S.A. Green Brazil USD 500 4.88 9/19/17 9/19/27 BB+ Pulp
2017 1,700
Klabin Austria GmbH Green Brazil USD 500 7.00 4/3/19 4/3/49 BB+ Pulp
Consorcio Transmantaro S.A. Green Peru USD 400 4.70 4/16/19 4/16/34 BBB Energy
Millicom International Cellular S.A. Sustainability Colombia SEK 208 2.32 5/15/19 5/15/24 NR Tele-
communications
NBM US Holdings, Inc. Sustainability Brazil USD 500 6.63 8/6/19 8/6/29 BB Food, Beverage
& Tobacco
AES Gener S.A. Green Chile USD 450 6.35 10/7/19 10/7/79 BB Energy
Celulosa Arauco y Constitucion S.A. Sustainability Chile USD 500 4.20 10/29/19 1/29/30 BBB Pulp
Celulosa Arauco y Constitucion S.A. Sustainability Chile USD 500 5.15 10/29/19 1/29/50 BBB Pulp
2019 3,058
Klabin Austria GmbH Green Brazil USD 200 7.00 1/15/20 4/3/49 BB+ Pulp
Rumo Luxembourg S.a.r.l. Green Brazil USD 500 5.25 7/10/20 1/10/28 BB Transportation
Coca-Cola FEMSA S.A.B. de C.V. Green Mexico USD 705 1.85 9/1/20 9/1/32 A– Food, Beverage
& Tobacco
Consorcio Transmantaro S.A. Green Peru USD 200 1.70 9/14/20 4/16/34 BBB Energy
Suzano Austria GmbH Sustainability- Brazil USD 1,250 3.75 9/14/20 1/15/31 BBB– Pulp
Linked
Fideicomiso Irrevocable 1721 Banco
Actinver, S.A., Institucion de Banca
Multiple, Grupo Financiero Actinver,
Division Fiduciaria (Fibra Prologis) Green Mexico USD 375 4.12 12/8/20 11/23/32 BBB Real Estate
FS Luxembourg S.a.r.l. Green Brazil USD 600 10.00 12/15/20 12/15/25 BB– Sugar & Ethanol
UEP Penonome II S.A. Green Panama USD 263 6.50 12/18/20 10/1/38 NR Energy
2020 4,093
Klabin Austria GmbH Sustainability- Brazil USD 500 3.20 1/12/21 1/12/31 BB+ Pulp
Linked
MercadoLibre Inc. Sustainability Argentina USD 400 2.38 1/14/21 1/14/26 BB+ Technology
Simpar Europe S.A. Sustainability- Brazil USD 625 5.20 1/20/21 1/26/31 BB– Transportation
Linked
Food, Beverage
Amaggi Luxembourg International S.a.r.l. Sustainability Brazil USD 750 5.25 1/28/21 1/28/28 BB & Tobacco
Movida Europe S.A. Sustainability- Brazil USD 500 5.25 2/8/21 2/8/31 BB– Transportation
Linked
Inversiones CMPC S.A. Sustainability- Chile USD 500 3.00 4/6/21 4/6/31 BBB Pulp
Linked
Investment Energy Resources Ltd. Green Guatemala USD 700 6.25 4/26/21 4/26/29 BB– Energy
Special Report │ July 14, 2021 fitchratings.com 8Corporates
Cross-Sector
Latin America
Latin America Non-Financial Corporates Offshore Sustainable Bonds
Amoun
t Issued
(USD Coupon Date of
Issuer Name Type Country Currency Mil.) (%) Issuance Maturity Rating Sector
Fomento Economico Mexicano Sustainability- Food, Beverage
S.A.B. de C.V. Linked Mexico EUR 605 1.00 4/28/21 5/28/33 A & Tobacco
Fomento Economico Mexicano Sustainability- Food, Beverage
S.A.B. de C.V. Linked Mexico EUR 846 0.50 4/28/21 5/28/28 A & Tobacco
Natura Cosmeticos S.A. Sustainability- Brazil USD 1,000 4.13 5/3/21 5/3/28 BB Consumer
Linked
Fideicomiso Irrevocable 1721 Banco
Actinver, S.A., Institucion de Banca
Multiple, Grupo Financiero Actinver,
Division Fiduciaria (Fibra Prologis) Green Mexico USD 70 3.73 5/4/21 4/22/31 BBB Real Estate
Metalsa S.A. de C.V. Sustainability- Mexico USD 300 3.75 5/4/21 5/4/31 BBB– Auto & Related
Linked
Iochpe-Maxion Austria GmbH/Maxion Sustainability-
Wheels de Mexico S de RL de CV Linked Brazil USD 400 5.00 5/7/21 5/7/28 BB– Auto & Related
Orbia Advance Corp S.A.B. de C.V. Sustainability- Mexico USD 600 1.88 5/11/21 5/11/26 BBB Chemicals
Linked
Orbia Advance Corp S.A.B. de C.V. Sustainability- Mexico USD 500 2.88 5/11/21 5/11/31 BBB Chemicals
Linked
Corporacion Inmobiliaria Vesta Sustainability-
S.A.B. de C.V. Linked Mexico USD 350 3.63 5/13/21 5/13/31 NR Real Estate
Inversiones Latin America Power Ltda. Green Chile USD 404 5.13 6/15/21 6/15/33 BB+ Energy
Sustainability- Food, Beverage
JBS Finance Luxembourg S.a.r.l. Linked Brazil USD 1,000 3.63 6/15/21 1/15/32 BBB– & Tobacco
Sustainability-
Nemak, S.A.B. de C.V. Linked Mexico USD 500 3.63 6/28/21 6/28/31 BBB– Auto & Related
Sustainability-
Suzano Austria GmbH Linked Brazil USD 1,000 3.13 7/1/21 1/15/32 BBB– Pulp
Sustainability-
Nemak, S.A.B. de C.V. Linked Mexico EUR 590 2.25 7/20/21 7/20/28 BBB– Auto & Related
2021 YTD 12,140
NR – Not rated.
Source: Fitch Ratings, Bloomberg.
Special Report │ July 14, 2021 fitchratings.com 9Corporates
Cross-Sector
Latin America
Appendix C — Latin America Sustainability and Sustainability-Linked Notes
Andre Maggi Participacoes S.A. (Amaggi)ESG Considerations
Amaggi has an ESG Relevance Score of ‘4’ for Governance Structure and Group Structure due to lack of board independence, as the
company is privately controlled and related-party transactions exist. The family’s strong influence upon management and the existence
of related-party transactions could result in decisions being made to the detriment of the company’s creditors, which would have a
negative impact on the credit profile and is relevant to the rating in conjunction with other factors.
Amaggi has an ESG Relevance Score of ‘4’ for Waste & Hazardous Material Management due to the ecological impact related to land
use and as part of the volumes of grains originating from the Amazon and Cerrado Biomes, which has a negative impact on the credit
profile and is relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Amaggi Luxembourg International S.a.r.l.
Guarantor Andre Maggi Participacoes S.A., Agropecuaria Maggi Ltda. and Amaggi Exportacao e Imporacao Ltda.
Type Sustainability bond
Country Brazil
Rating BB
Amount USD750 million
Issue Date 1/28/21
Maturity Date 1/28/28
Interest Rate 5.250%
Interest Rate Step Up N.A.
Use of Proceeds Amaggi will allocate the net proceeds from the sustainability notes to finance or refinance, in whole or in part, one or
more new or existing eligible projects.
SPTs N.A.
Principles Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines — International Capital Markets
Association (ICMA).
Reporting Amaggi will publish a sustainable bond report on its website annually, until full allocation of the net proceeds from the
sustainability bond.
N.A. – Not applicable. SPT – Sustainability performance target.
Source: Fitch Ratings, Amaggi Luxembourg International S.a.r.l.
Special Report │ July 14, 2021 fitchratings.com 10Corporates
Cross-Sector
Latin America
Celulosa Arauco y Constitucion S.A.
ESG Considerations
Arauco has an ESG Relevance Score of ‘4’ for Exposure to Environmental Impacts (EIM), as Chilean forestry companies are exposed to
forest fire risk, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors.
Arauco has an ESG Relevance Score of ‘4 [+]’ for Environment - Energy Management (EFM), as the company sells excess energy to the
grid from cogeneration based upon a renewable resource, which has a positive impact on the credit profile, and is relevant to the ratings
in conjunction with other factors.
Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of ‘3’. This means - ESG issues are
credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed
by the entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Celulosa Arauco y Constitucion S.A.
Guarantor —
Type Sustainability bond
Country Chile
Rating BBB
Amount USD500 million
Issue Date 10/29/19
Maturity Date 10/29/30
Interest Rate 4.200%
Interest Rate Step Up N.A.
Use of Proceeds Arauco will allocate an amount equal to the net proceeds from the sustainability bonds to finance and refinance, in
whole or in part, eligible green projects and eligible social projects of the company or any of its subsidiaries and/or
affiliates.
SPTs N.A.
Principles Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines — International Capital Markets
Association (ICMA).
Reporting Arauco will publish updates on its website annually, until all the net proceeds have been allocated, which are expected
to include:
• The amount of net proceeds of the sustainability bonds allocated to each eligible project category;
• Expected or estimated key performance indicators (qualitative and quantitative), in each case to the extent
Arauco deems feasible;
• The outstanding amount of net proceeds yet to be allocated to eligible projects at the end of the reporting period.
N.A. – Not applicable. SPT – Sustainability performance target.
Source: Fitch Ratings, Celulosa Arauco y Constitucion S.A.
Special Report │ July 14, 2021 fitchratings.com 11Corporates
Cross-Sector
Latin America
Issuer Celulosa Arauco y Constitucion S.A.
Guarantor —
Type Sustainability bond
Country Chile
Rating BBB
Amount USD500 million
Issue Date 10/29/19
Maturity Date 10/29/50
Interest Rate 5.150%
Interest Rate Step Up N.A.
Use of Proceeds Arauco will allocate an amount equal to the net proceeds from the sustainability bonds to finance and refinance, in
whole or in part, eligible green projects and eligible social projects of the company or any of its subsidiaries and/or
affiliates.
SPTs N.A.
Principles Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines – International Capital Markets
Association (ICMA).
Reporting Arauco will publish updates on its website annually, until all the net proceeds have been allocated, which are expected
to include:
• The amount of net proceeds of the sustainability bonds allocated to each eligible project category;
• Expected or estimated key performance indicators (qualitative and quantitative), in each case to the extent
Arauco deems feasible;
• The outstanding amount of net proceeds yet to be allocated to eligible projects at the end of the reporting period.
N.A. – Not applicable. SPT – Sustainability performance target.
Source: Fitch Ratings, Celulosa Arauco y Constitucion S.A.
Special Report │ July 14, 2021 fitchratings.com 12Corporates
Cross-Sector
Latin America
Corp Inmobiliaria Vesta S.A.B. de C.V.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Corporacion Inmobiliaria Vesta S.A.B. de C.V.
Guarantor N.A.
Type Sustainability-linked bond
Country Mexico
Rating NR
Amount USD350 million
Issue Date 5/13/21
Maturity Date 5/13/31
Interest Rate 3.625%
Interest Rate Step Up N.A.
Use of Proceeds N.A.
SPTs N.A.
Principles Sustainability-Linked Bond Principles – International Capital Markets Association (ICMA).
Reporting Vesta will publish annually and keep readily available and easily accessible on its website a sustainability-linked bond
update included in its annual report, including up-to-date information on the performance of the selected key
performance indicator; a verification assurance report relative to the SPT outlining the performance against the SPT
and the related impact, and timing of such impact; and any relevant information enabling investors to monitor the
progress of the SPT.
N.A. – Not applicable. NR – Not rated. SPT – Sustainability performance target.
Source: Fitch Ratings, Corporacion Inmobiliaria Vesta S.A.B. de C.V.
Special Report │ July 14, 2021 fitchratings.com 13Corporates
Cross-Sector
Latin America
Fomento Economico Mexicano S.A.B. de C.V. (FEMSA)
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA)
Guarantor —
Type Sustainability-linked bond
Country Mexico
Rating A
Amount EUR700 million
Issue Date 4/28/21
Maturity Date 5/28/28
Interest Rate 0.500% per annum
Interest Rate Step Up 25bps per year if FEMSA fails to meet the SPTs.
Use of Proceeds The proceeds from the issuance were used to redeem FEMSA’s EUR1 billion 1.75% senior notes due 2023.
SPTs A renewable energy percentage at least equal to 65%, and zero operational waste to landfill percentage at least equal
to 65%, in each case, calculated for the year ended Dec. 31, 2025.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting FEMSA will publish annually on its website a sustainability-linked securities update within its sustainability annual
report, which will include up-to-date information on the performance with respect to the key performance indicators'
zero operational waste to landfill percentage and renewable energy percentage, together with a verification
assurance report issued by the external verifier.
SPT – Sustainability performance target.
Source: Fitch Ratings, Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA).
Issuer Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA)
Guarantor —
Type Sustainability-linked bond
Country Mexico
Rating A
Amount EUR500 million
Issue Date 4/28/21
Maturity Date 5/28/33
Interest Rate 1.000% per annum
Interest Rate Step Up 25bps per year if FEMSA fails to meet the SPTs.
Use of Proceeds The proceeds from the issuance were used to redeem FEMSA’s EUR1 billion 1.75% senior notes due 2023.
SPTs A renewable energy percentage at least equal to 85%, and zero operational waste to landfill percentage at least equal
to 100%, in each case, calculated for the year ended Dec. 31, 2030.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting FEMSA will publish annually on its website a sustainability-linked securities update within its sustainability annual
report, which will include up-to-date information on the performance with respect to the key performance indicators'
zero operational waste to landfill percentage and renewable energy percentage, together with a verification
assurance report issued by the external verifier.
SPT – Sustainability performance target.
Source: Fitch Ratings, Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA).
Special Report │ July 14, 2021 fitchratings.com 14Corporates
Cross-Sector
Latin America
Empresas CMPC S.A.
ESG Considerations
CMPC has an ESG Relevance Score of ‘4’ for Exposure to Environmental Impacts (EIM), as Chilean forestry companies are exposed to
forest fire risk, which has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.
CMPC has an ESG Relevance Score of ‘4[+]’ for Environment - Energy Management (EFM), as the company sells excess energy to the
grid from cogeneration based upon a renewable resource, which has a positive impact on the credit profile and is relevant to the ratings
in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Inversiones CMPC S.A.
Guarantor Empresas CMPC S.A.
Type Sustainability-linked bond
Country Chile
Rating BBB
Amount USD500 million
Issue Date 4/6/21
Maturity Date 4/6/31
Interest Rate 3.00%
Interest Rate Step Up 12.5bps from and including Oct. 6, 2026, if CMPC meets only one of either the greenhouse gas key performance
indicator (GHG KPI) reduction target or the water KPI reduction target, and 25bps from and including Oct. 6, 2026, if
CMPC fails to meet both KPI targets.
Use of Proceeds General corporate purposes.
SPTs Reduce greenhouse gas emissions intensity to 1,833,060 tCO2e produced or less by the end of 2025, equivalent to an
estimated 23.5% reduction, as measured against the 2018 baseline year (GHG KPI);
Reduce industrial water use intensity to 23.13 cubic meters/ton produced or less by the end of 2025, equivalent to an
estimated 25% reduction, as measured against the 2018 baseline year (water KPI).
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting Pursuant to the Sustainability-Linked Bond Framework, CMPC will publish annually on its website a sustainability-
linked bond update as part of its annual Sustainable Finance Impact Report, which will include up-to-date information
on its performance with respect to the key performance indicators.
SPT – Sustainability performance target. TCO2e – Tons of carbon dioxide equivalent emissions.
Source: Fitch Ratings, Empresas CMPC S.A.
Special Report │ July 14, 2021 fitchratings.com 15Corporates
Cross-Sector
Latin America
Iochpe-Maxion S.A.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Iochpe-Maxion Austria GmbH and Maxion Wheels de Mexico, S. de R.L. de C.V.
Guarantor Iochpe-Maxion S.A.
Type Sustainability-linked bond
Country Brazil
Rating BB–
Amount USD400 million
Issue Date 5/7/21
Maturity Date 5/7/28
Interest Rate 5.00%
Interest Rate Step Up 25bps from and including Nov. 7, 2026, if Iochpe fails to meet the sustainability performance target.
Use of Proceeds Repay a euro-denominated unsecured syndicated loan agreement entered by the subsidiaries Iochpe-Maxion Austria,
Maxion Wheels Holding GmbH and Maxion Wheels Czech s.r.o.; repay the outstanding indebtedness of the subsidiary
Maxion Wheels de Mexico and a portion of the outstanding indebtedness of the subsidiary Ingeniaria y Maquinaria de
Guadalupe, S.A. de C.V.; and repay a portion of the company's outstanding indebtedness.
SPTs Reduce greenhouse gas emissions intensity by 30% by Dec. 31, 2025, based on linear annual improvements against
the 2019 baseline year, which will result in a 70% reduction by the end of 2030, subject to certain exclusions related
to significant acquisitions and changes in laws and regulations.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting Iochpe will report the annual progress of the key performance indicators in its sustainability report, which is
externally verified and available on its website.
SPT – Sustainability performance target.
Source: Fitch Ratings, Iochpe-Maxion S.A.
Special Report │ July 14, 2021 fitchratings.com 16Corporates
Cross-Sector
Latin America
JBS S.A.
ESG Considerations
JBS has an ESG Relevance score ‘5’ for Governance Structure for ownership concentration and due to the Comissão de Valores
Mobiliários’ ongoing investigation and criminal proceedings into JBS’s ultimate controlling shareholders for alleged violations of
Brazilian securities and corporate law, which has a negative rating impact on the credit profile and is highly relevant to the ratings in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer JBS Finance Luxembourg S.a.r.l.
Guarantor JBS S.A.
Type Sustainability-linked bond
Country Brazil
Rating BBB–
Amount USD1 billion
Issue Date 6/15/21
Maturity Date 1/15/32
Interest Rate 3.625%
Interest Rate Step Up 25bps per year if JBS fails to meet the SPTs.
Use of Proceeds General corporate purposes, which may include the refinancing of shorter maturity indebtedness.
SPTs Reduce greenhouse gas emissions intensity by 16.364% by Dec. 31, 2025, based on linear annual improvements
against the 2019 baseline year, which will result in a 30% reduction by the end of 2030, subject to certain exclusions
related to significant acquisitions and changes in laws and regulations.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting JBS will publish annually on its website a sustainability-linked bond update within its Sustainability Annual Report,
which will include up-to-date information on the performance with respect to the key performance indicator
greenhouse gas emissions intensity, together with a verification assurance report issued by the external verifier.
SPT – Sustainability performance target.
Source: Fitch Ratings, JBS S.A.
Special Report │ July 14, 2021 fitchratings.com 17Corporates
Cross-Sector
Latin America
Klabin S.A.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Klabin Austria GmbH
Guarantor Klabin S.A.
Type Sustainability-linked bond
Country Brazil
Rating BB+
Amount USD500 million
Issue Date 1/12/21
Maturity Date 1/12/31
Interest Rate 3.20%
Interest Rate Step Up If the water consumption intensity target is not met, by 12.5bps;
If the waste reuse and recycling target is not met, by 6.25bps; and/or
If the reintroduction and/or reinforcement of wild species into the ecosystem target is not met, by 6.25bps.
Use of Proceeds Proceeds from the senior notes will be used for the tender offer for any and all of its outstanding 2024 notes and for
general corporate purposes.
SPTs -Water consumption intensity target equal to or less than 3.68 cubic meters/ton on Dec. 31, 2025;
-Waste reuse and recycling target as a percentage equal to or greater than 97.5% on Dec. 31, 2025;
-Reintroduction and/or reinforcement of wild species into the ecosystem of at least two extinct or threatened species,
calculated through rewilding initiatives concluded by 2025.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting According to the Sustainability-Linked Framework, Klabin will include updates on SPT performance in its Annual
Sustainability Report.
SPT – Sustainability performance target.
Source: Fitch Ratings, Klabin S.A.
Special Report │ July 14, 2021 fitchratings.com 18Corporates
Cross-Sector
Latin America
Marfrig Global Foods S.A.
ESG Considerations
Marfrig has an ESG Relevance Score of ‘4’ for Governance Structure due to ownership concentration, which has a negative impact on
the credit profile and is relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer NBM US Holdings, Inc.
Guarantor Marfrig Global Foods S.A., MARB BondCo PLC, Marfrig Holdings (Europe) B.V. and Marfrig Overseas Limited
Type Sustainability bond
Country Brazil
Rating BB
Amount USD500 million
Issue Date 8/6/19
Maturity Date 8/6/29
Interest Rate 6.625%
Interest Rate Step Up N.A.
Use of Proceeds Marfrig will use the net proceeds from the sustainability bond to fund the purchase of cattle in the Amazon Biome
region in Brazil, with a view toward contributing to the preservation of the environment and a more sustainable world.
SPTs N.A.
Principles Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines — International Capital Markets
Association (ICMA).
Reporting Marfrig will publish an annual sustainable report within one year of the issuance of the sustainable transition bond
and annually thereafter.
N.A. – Not applicable. SPT – Sustainability performance target.
Source: Fitch Ratings, Marfrig Global Foods S.A.
Special Report │ July 14, 2021 fitchratings.com 19Corporates
Cross-Sector
Latin America
MercadoLibre, Inc.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer MercadoLibre, Inc.
Guarantor Certain subsidiaries
Type Sustainability bond
Country Argentina
Rating BB+
Amount USD400 million
Issue Date 1/14/21
Maturity Date 1/14/26
Interest Rate 2.375%
Interest Rate Step Up N.A.
Use of Proceeds MercadoLibre will allocate the net proceeds from the sustainability notes to finance or refinance, in whole or in part,
one or more new and/or existing eligible green projects and/or eligible social projects.
SPTs N.A.
Principles Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines — International Capital Markets
Association (ICMA).
Reporting MercadoLibre will publish a sustainable bond report on its website within one year of the date of the issuance and
annually thereafter, until full allocation of the net proceeds from the sustainability bond.
N.A. – Not applicable. SPT – Sustainability performance target.
Source: Fitch Ratings, MercadoLibre, Inc.
Special Report │ July 14, 2021 fitchratings.com 20Corporates
Cross-Sector
Latin America
Metalsa S.A. de C.V.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Metalsa, S.A. de C.V.
Guarantor Metalsa Roanoke, Inc. and Metalsa Structural Products, Inc.
Type Sustainability-linked bond
Country Mexico
Rating BBB–
Amount USD300 million
Issue Date 5/4/21
Maturity Date 5/4/31
Interest Rate 3.75%
Interest Rate Step Up 25pbs from and including Nov. 4, 2027, if Metalsa fails to meet the sustainability performance target.
Use of Proceeds Pay, in whole or in part, the consideration for the tender offer and accrued and unpaid interest and additional amounts
on the 2023 international notes validly tendered and accepted by the company; pay fees and expenses incurred in
connection with the tender offer; and the remainder, if any, for debt repayment and general corporate purposes.
SPTs Reduce greenhouse gas emission intensity to 70 tCO2e/USD million produced or less by the end of 2026, equivalent
to at least an estimated 10% reduction as measured against the 2019 baseline year, subject to certain exclusions
related to significant acquisitions and changes in laws and regulations.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting Metalsa will publish annually on its website a sustainability-linked instrument report within its Annual Sustainability
Report, which will include up-to-date information on the performance with respect to the greenhouse gas emissions
intensity key performance indicator, together with a verification assurance report issued by the external verifier.
SPT – Sustainability performance target. TCO2e – Tons of carbon dioxide equivalent emissions.
Source: Fitch Ratings, Metalsa, S.A. de C.V.
Special Report │ July 14, 2021 fitchratings.com 21Corporates
Cross-Sector
Latin America
Movida Participacoes S.A.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG Credit Relevance is a Score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by
the entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Movida Europe S.A.
Guarantor Movida Participações S.A., Movida Locação de Veículos S.A. and Movida Locação de Veículos Premium Ltda.
Type Sustainability-linked bond
Country Brazil
Rating BB–
Amount USD500 million
Issue Date 2/8/21
Maturity Date 2/8/31
Interest Rate 5.25%
Interest Rate Step Up 25bps per year if Movida fails to meet the SPTs.
Use of Proceeds General corporate purposes, including capex.
SPTs Achieve a ratio equal to or less than 45.37 of produced tCO2e and net revenue in reals (tCO2e/BRL million net
revenue), in the year ended 2025. This is a reduction of 15% from 2019 baseline of GHG emissions.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting Movida will publish a sustainability-linked securities update on its website annually.
SPT – Sustainability performance target. TCO2e – Tons of carbon dioxide equivalent emissions.
Source: Fitch Ratings, Movida Participacoes S.A.
Special Report │ July 14, 2021 fitchratings.com 22Corporates
Cross-Sector
Latin America
Natura Cosmeticos S.A.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Natura Cosmeticos S.A
Guarantor Natura &Co Holding S.A.
Type Sustainability-linked bond
Country Brazil
Rating BB
Amount USD1 billion
Issue Date 5/3/21
Maturity Date 5/3/28
Interest Rate 4.13%
Interest Rate Step Up The interest rate payable on the notes shall be increased by 65bps per annum, unless each of the sustainability
performance targets has been satisfied.
Use of Proceeds Proceeds will be used to refinance debt, including the existing 2024 notes.
SPTs Greenhouse gas emissions intensity target by 13% by 2026 against the 2019 baseline;
Reach at least 25% of post-consumer recycled plastic usage in plastic product packaging by 2026.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting Natura will publish an annual report on its investor relations website after each calendar year end to provide updates
on each SPT.
SPT – Sustainability performance target.
Source: Fitch Ratings, Natura Cosmeticos S.A.
Special Report │ July 14, 2021 fitchratings.com 23Corporates
Cross-Sector
Latin America
Nemak, S.A.B. de C.V.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG Credit Relevance is a Score of ‘3’. This means ESG issues are credit-
neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the
entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg.
Terms and Conditions
Issuer Nemak, S.A.B. de C.V.
Guarantor —
Type Sustainability-linked bond
Country Mexico
Rating BBB–
Amount USD500 million
Issue Date 6/28/21
Maturity Date 6/28/31
Interest Rate 3.625%
Interest Rate Step Up 25bps per year if Nemak fails to meet the SPTs.
Use of Proceeds General corporate purposes, which may include repayment or retirement of indebtedness, including the redemption
in whole or in part of the USD500 million 4.75% senior notes due 2025.
SPTs Reduce GHG emissions by 18% by the end of 2026, as measured against the 2019 baseline year.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting Pursuant to the Sustainability-Linked Bond Framework, Nemak will publish annually on its website a sustainability-
linked instrument report within its Annual Sustainability Report, which will include up-to-date information on its
performance with respect to the key performance indicator.
SPT – Sustainability performance target.
Source: Fitch Ratings, Nemak, S.A.B. de C.V.
Issuer Nemak, S.A.B. de C.V.
Guarantor —
Type Sustainability-linked bond
Country Mexico
Rating BBB–
Amount EUR500 million
Issue Date 7/20/21
Maturity Date 7/20/28
Interest Rate 2.250%
Interest Rate Step Up 25bps per year if Nemak fails to meet the SPTs.
Use of Proceeds Fund a cash tender offer of Nemak’s EUR500 million 2024 notes and for general corporate purposes.
SPTs Reduce greenhouse gas emissions by 18% by the end of 2026, as measured against the 2019 baseline year.
Principles Sustainability-Linked Bond Principles — International Capital Markets Association (ICMA).
Reporting Pursuant to the Sustainability-Linked Bond Framework, Nemak will publish annually on its website a sustainability-
linked instrument report within its Annual Sustainability Report, which will include up-to-date information on its
performance with respect to the key performance indicator.
SPT – Sustainability performance target.
Source: Fitch Ratings, Nemak, S.A.B. de C.V.
Special Report │ July 14, 2021 fitchratings.com 24You can also read
