Thai Union issues first Thai sustainability-linked bond

This is the first Sustainability-Linked Bond that has been launched in Thailand and follows the launch of Thai Union’s inaugural Sustainability-Linked Loan (SLL).

Thai Union issues first Thai sustainability-linked bond
July 22, 2021

Thai Union Group priced a THB5 billion ($154 million) seven-year senior, unsecured Sustainability-Linked Bond (SLB) for institutional investors. The SLB carries an interest rate of 2.47%. p.a.

This is the first SLB that has been launched in Thailand and follows the launch of Thai Union’s inaugural Sustainability-Linked Loan (SLL) in February 2021, further demonstrating the company’s ongoing commitment to its ESG principles. It is another significant step forward for Blue Finance—financing for projects benefiting oceans—and the seafood industry as a whole. TRIS Rating Co., Ltd. rated the bond as “A+” with a “Stable” outlook on July 16, 2021, showing the strength of Thai Union’s position as one of the world’s leading seafood processors and providing a solid indication of the company’s financial standing.

Bank of Ayudhya Public Company Limited (Krungsri) is the sole arranger for this offering, while both Krungsri and MUFG Securities Asia Limited, the securities entity of Mitsubishi UFJ Financial Group, Inc. (MUFG), are the Joint Sustainability-Linked Structuring Advisors.

Thai Union’s SLB is not only the first in Thailand but also the first globally to introduce step-up and/or step-down facilities related to the achievement of Sustainability Performance Targets (SPTs). These targets include remaining in the Dow Jones Sustainability Index (DJSI) Emerging Markets and ranking in the top 10 companies for the DJSI Food Products Industry Index; reducing Thai Union’s Scope 1 and Scope 2 carbon emissions from manufacturing operations by 4% annually (carbon intensity); and increasing the monitoring and surveillance of Thai Union’s wild-caught tuna supply chains, whether electronically and/or through the use of human observers at sea. Investors in the bond will be entitled to a lower or higher coupon should the company achieve or fail to achieve these SPTs in 2023 and 2026. The company’s Sustainability-Linked Financing Framework is externally verified by Sustainalytics to ensure alignment with international best practices and standards.

“Sustainability is central to our operations and business philosophy and we have committed to a policy of Healthy Living, Healthy Oceans. This type of Blue Financing represents another way we can now work with our partners in the financial community on products that help ensure we continue to preserve the oceans that are vital not only to our business but also the planet while providing healthy and nutritious products that health-conscious consumers globally are demanding,” said Thiraphong Chansiri, president and CEO of Thai Union. “We are extremely proud to have launched Thailand’s first Sustainability-Linked Bond and are grateful for the nod of approval to this offering through the unprecedented interest shown by institutional investors including government-related funds, life insurance companies, asset management companies, and banks.”