Lanxess bets on sustainability, links credits terms with climate targets

Lanxess, a Cologne-based leading specialty chemicals company, has signed an innovative revolving credit facility of 1 billion euros. It has now linked its main revolving credit facility and the interest rate terms with the fulfillment of ESG (Environment, Social and Governance) criterion. In this new syndicated credit facility with 12 banks, the interest conditions depend on the successful reduction of its greenhouse gas emissions and the increase in the proportion of women on the top three management levels.

The revolving credit facility is intended to secure the company’s liquidity in the long-term, provide financial backup for growth and was coordinated by Deutsche Bank and UniCredit. With a volume of 1 billion euros, Lanxess replaces the syndicated loan of 1.25 billion euros expiring in May 2023. This ‘sustainable’ revolving credit facility has an initial term of five years as well as two options for one-year extensions.

Michael Pontzen, Lanxess’ Chief Financial Officer said, “We are convinced that sustainable criteria are also becoming increasingly important for the capital markets. We have therefore developed this innovative financing concept together with our banking partners. With the 'sustainable' revolving credit facility, we are also underlining our commitment to achieving our ambitious climate targets.”

Interestingly, in November, Lanxess announced that it will go climate neutral and eliminate its current greenhouse gas emissions of 3.2 million metric tonnes of carbon dioxide by 2040. Michael Pontzen added that that “have used the good capital market environment and our solid investment grade rating to secure Lanxess’ long-term financing on attractive terms.”

The company currently has about 15,400 employees in 33 countries and is represented at 60 production sites worldwide.