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Allen & Overy advises on landmark EUR 500m sustainability-linked bond issuance by Worley

Allen & Overy has advised BNP Paribas, HSBC, Bank of China, Standard Chartered Bank and Wells Fargo as joint lead managers on the EUR 500 million five-year sustainability-linked eurobond issued by Australian engineering consultancy firm Worley.

Worley’s sustainability-linked bond (“SLB”) transaction is a ground-breaking deal by an Australian corporate on the global stage. It is the first public SLB transaction from an Australian corporate in any market and is Worley’s first-ever public capital markets deal. Worley is the first issuer globally to execute its debut public transaction as an SLB. The transaction marked the inaugural issuance under Worley’s recently established USD 2 billion euro medium term note programme.

The transaction was also significant as it was the largest issue size and lowest coupon ever paid for any five-year euro issue by a BBB rated Australian company.

BNP Paribas are the Arranger on the programme and were Joint Active Lead Manager on the transaction. HSBC was the ESG Structuring Adviser as well as the Joint Active Lead Manager on the transaction.

The SLB is an important step in Worley’s decarbonisation strategy as the deal is linked to a single bold key performance target of a 50 per cent reduction in scope 1 and scope 2 CO2 greenhouse gas emissions from a 2020 baseline by 2025. 

Commenting on the transaction, partner Minesh Patel said: “Worley’s first sustainability-linked bond issuance is noteworthy on multiple fronts. Worley has broken new ground for an Australian company in SLB issuance and we expect this deal to set a precedent for other corporates considering raising debt in this category, especially those targeting an offshore investor base that is becoming increasingly selective in their assessment of SLBs”.

Minesh adds: “The deal signals the start of a rapid rise of sustainability-linked bonds and loans in the Australian market. For our part, the Allen & Overy capital markets and finance teams are increasingly advising on funding deals linked to performance indicators such as decarbonisation, social sustainability and good corporate governance. 

“The capital markets landscape for Australian issuers is transforming swiftly. Sustainability is now a leading concern for corporates and investors alike and we expect to see these elements more frequently as part of transaction structures going forwards.

“It was a pleasure to advise BNP Paribas, HSBC, Bank of China, Standard Chartered and Wells Fargo in their roles and to work alongside the Worley team and their advisers to execute the transaction.” 

The Allen & Overy team was led by partner Minesh Patel with support from associates Thomas Pertsoulis, Caitlin Lee and Kevin Lee.

The Allen & Overy Corporate Trustee team led by Partner Tim Beech and senior associate Holly Hart advised The Bank of New York Mellon as Bond Trustee and Paying Agent on the programme and the transaction.