Leading South African private healthcare provider, Netcare, in partnership with Standard Bank has listed the continent’s first self-labelled sustainability-linked bond on the Johannesburg Stock Exchange (JSE).
Netcare together with Standard Bank raised a R1 billion, 3-year, unsecured note priced at 5.4% (3 Month Jilbar +175bps). These funds raised through the bond will enable the healthcare group to fulfil its sustainability objectives of reducing its carbon footprint by procuring more renewable energy and further improving its water efficiency, among other things.
The coupon rate of these bonds is linked to the issuer’s achievement of certain pre-agreed sustainability performance targets. In the event that Netcare achieves its sustainability targets linked to the bond, the Group will benefit from a lower interest rate, thereby directly linking its sustainability performance with its cost of capital.
“As a champion of sustainability and sustainable economic growth, the JSE welcomes the Netcare and Standard Bank partnership which has debuted Africa’s very first sustainability-linked bond. We are thrilled to see organisations working towards building a low carbon economy and creating a sustainable future for all,” says Sam Mokorosi, Head of Origination and Deals at the JSE.
The JSE has introduced several sustainability initiatives over the years. In 2004, the bourse introduced the first exchange-sponsored sustainability index globally, which was also the first sustainability index in emerging markets. The JSE is also a signatory to the United Nations-backed Principles for Responsible Investment and a founding partner of the Sustainable Stock Exchanges Initiative (SSE).
