OVS to issue a sustainability-linked bond worth 200 million euros

YarnsandFibers News Bureau 2021-10-14 11:11:04 – Italy

Italian clothing company, OVS S.p.A. has opted to issue a six-year sustainability-linked bond worth up to 200 million euros. This sounds familiar because H&M, Burberry, and Adidas were among the first to see the potential of sustainability-linked bonds.

The board of directors of OVS decided to issue an unrated, unsecured, non-convertible, and unsubordinated senior sustainability-linked bond linked to sustainability performance for a principal amount of between 150 million euros and 200 million euros, addressed to institutional investors in Italy and abroad and retail investors in Italy. Tamburi Investment Partners, one of OVS' most important shareholders, has already expressed interest to subscribe to the new bond.

OVS said that with the issuing of this bond, the Group's financial structure, which was already strengthened by the recent capital increase and excellent cash flow performance, will be further improved, allowing for a concomitant reduction in the cost of debt. In addition, financial resources will be made available to activate technological innovation initiatives aimed at energy conservation, such as the installation of photovoltaic panels, the replacement of lighting systems with less heat loss, the digitalization of control systems, and the energy management of stores.

The bond's term is set at six years from the date of issuance, with an annual interest rate of no less than 2%. The Bond will be issued at 100% of its nominal value, with a denomination of 1000 euros, and will be available for subscription through Borsa Italiana S.p.Italian A.'s electronic bond and government securities market (MOT).

The proceeds of the offering will be used to repay the Group's existing financial liabilities ahead of schedule, extending the maturity period of accessible lines of credit and therefore freeing up resources for circular economy investments.

According to OVS, the third quarter is continuing in a very positive manner. Delivery delays have been mostly recovered to date, and current inflationary pressures are not regarded as a threat to our industry; the year-ahead guidance offered upon publication of the first-half results is thus fully confirmed.

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