The Polish oil company is the first company in Central Europe to issue an ESG linked bond. The company announced the new bond on its website adding some details about how ESG rating will impact interest rate.
Bonds will be of variable interest rate. The interest rate calculated according to the Bond issue terms and conditions, for all interest periods will be WIBOR 6M increased by margin. The level of margin will depend on rating of ESG agency, i.e. MSCI ESG Research (UK) Limited or another entity that will replace it.
The margin for the first interest period will amount to 90 bp and in the next interest periods it is possible to add to the margin 5 or 10 bp per annum, respectively, depending on the level of ESG rating admitted according to the Bond issue terms and conditions.
ESG ratings measure the company’s risks and performance on material Environmental, Social and Governance areas.
The company did not specify its current score or what projects it will finance from the bond. Its statement says that it will use the financial resources from the Bonds for general corporate purposes, including realization of ESG targets to maintain or improve its ESG rating admitted by the MSCI ESG Research (UK) Limited.