PKN ORLEN diversifies its sources of funding by raising funds through the issue of sustainable bonds. By the end of March, the Group will issue PLN 1bn worth of bonds due in ten years, with a fixed coupon of 2.875% per annum which may increase by 0.1% or 0.2% depending on the ESG rating from MSCI ESG Research (UK) Limited. This will be already the second issue of sustainable bonds by PKN ORLEN, adding a stable long-term instrument to its portfolio of debt liabilities and thus improving the ORLEN Group’s financial security.
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‘As a leader of Poland’s energy transition, we plan to complete a number of ambitious projects that will help reduce CO2 emissions and contribute to the development of renewable energy sources. In line with our strategy, their implementation will be largely based on sustainable financing. We are a seasoned capital market player, able to identify the needs of its participants, hence our decision to proceed with the second issue of ESG bonds, which are in great demand. This not only brings us closer to achieving our strategic objectives, but also enhances investor confidence in our company as a reliable and responsible partner,’ said Daniel Obajtek, President of the PKN ORLEN Management Board.
The proceeds will be applied towards Group-wide purposes, including the objective of maintaining or improving the ESG rating. The bonds are offered to investors interested in fixed-coupon assets with long maturities. The largest pools of bonds were purchased by insurance companies and investment funds. Bank Pekao S.A. is the issue coordinator and issue agent.
The first issue of ESG bonds by PKN ORLEN in December 2020 attracted strong interest from investors – in the bookbuilding process they placed subscription orders for PLN 2.2bn worth of bonds, more than twice their total nominal value. The Group secured very good terms of financing – the interest rate was the lowest in its operating history and the margin was the lowest since the 2008 financial crisis. The first issue bonds were rated BBB- by Fitch Ratings.
PKN ORLEN consistently strives to reach carbon neutrality, be energy efficient and follow superior safety standards. Its expanding ESG competencies are reflected in the 2020 rating upgrade from Sustainalytics. PKN ORLEN ranked fifth among 86 Oil & Gas Refining and Marketing companies (in the Refiners & Pipelines category). The company was promoted from the high risk category in 2019 to the medium risk category, which means it is at medium risk of experiencing financial impacts from ESG factors.
Sustainability and corporate responsibility are key aspects of the company’s carbon neutrality strategy until 2050. To further this strategic vision, at the beginning of September 2020 PKN ORLEN stated its commitment to reducing CO2 emissions from its existing refining and petrochemical assets by 20% and from electricity generation by 33% per MWh by 2030. Projects implemented under the carbon neutrality strategy are expected to be partly financed through green and sustainable bonds issued by PKN ORLEN on the European capital market.