Ropes & Gray Advises VodafoneZiggo on €2.1 Billion Issue of Innovative Sustainability Bonds
Ropes & Gray has advised VodafoneZiggo on its debut ‘sustainability-linked bonds’, €2.1 billion (equivalent) Sustainability-Linked Senior Secured Notes due 2032, that were issued on 20 January 2022 by an SPV in accordance with VodafoneZiggo’s newly established Sustainable Finance Framework, which is aligned with the ICMA’s Sustainability-Linked Bond Principles. The proceeds of the offering are expected to be used to redeem €2.1 billion (equivalent) of existing indebtedness of VodafoneZiggo.
VodafoneZiggo is a leading Dutch company that provides video, broadband internet, fixed-line telephony and mobile services to residential and business customers in the Netherlands. As of 30 September 2021, they provided fixed services to approximately 9.2 million RGUs and provided mobile telephony services to approximately 5.3 million mobile telephony customers.
In connection with the Sustainable Finance Framework and under the terms of the notes, VodafoneZiggo has committed to achieve certain Sustainability Performance Targets of reducing its scope 1, 2 and 3 GHG emissions by 50% from a 2018 baseline by no later than 2025.
Failing to meet one or more of such targets, the issuer of the notes will pay an increased interest rate from 2026 and/or an increased optional redemption price until maturity. However, in no case will such failure to meet one or more of the targets constitute an event of default under the terms of the notes. On the other hand, if VodafoneZiggo achieves both of the targets, the notes will benefit from a reduction of their optional redemption price – a feature that is new to the sustainability-linked bond market.
The Ropes & Gray team was led by finance partner Rob Haak, with finance associates Clara Melly, Sonali Kapoor, Lucrezia Sperzani, Matea Scepanovic and Debkanya Naskar, all based in London. Finance partner Alex Robb with finance associate Hoey Lee and trainee Charlotte Hoggarth, also based in London, advised on the loan financing aspects of the transaction.
Ropes & Gray's London finance team is a leading legal adviser in public and private high yield markets. Its London finance team is committed to supporting issuers and borrowers in promoting their sustainable finance objectives and has a depth of knowledge and experience in this area. In 2020, the firm advised VodafoneZiggo on its debut green bond issuance.