RMB initiates gender-driven bond issuance worth over R1bn for Barloworld

Rand Merchant Bank (RMB) has arranged a R1.14 billion gender-linked bond issuance for industrial group Barloworld which will see a pricing advantage if it achieves its gender performance targets. Trishalia Naidoo from RMB’s debt capital market team says the gender-linked bonds are priced competitively compared to Barloworld’s traditional bonds, which primarily consist of funding raised for sustainably-focused debt instruments.

“This instrument further delivers a pricing benefit for Barloworld on the achievement of the gender performance targets and is a great demonstration of how to align an issuer’s financial strategy with its sustainability strategy, through innovative solutions,” she adds. RMB says it worked closely with Barloworld to establish a gender-linked bond framework that clearly outlines the strategic relevance of gender diversity, and could further enable the group to issue similar instruments in the future.

“The framework has been externally verified to confirm its alignment with the international capital market associations’ sustainability linked bond principles,” it says. The bond will be listed on the JSE’s sustainability segment once it has complied with the latest debt listing requirements.

Barloworld group finance director Nopasika Lila says the issuance of bonds with gender specific KPIs (key performance indicators) makes this the first of its kind in Africa and demonstrates the group’s commitment while enabling stakeholders to track its progress in this regard. “Barloworld is committed to playing [a] role in driving gender equity in South Africa and across our markets of operation ...

The KPIs that have been outlined are in line with our diversity and inclusion journey,” Lila noted in a statement issued on Friday. According to Danielle Frank from RMB’s sustainable finance and ESG advisory team, the bond not only recognises the need for greater gender transformation in the country, but also acknowledges local investor demand for more socially-aligned instruments.

Naidoo says RMB is confident that the transaction sets the benchmark for other corporates on the continent and will further encourage companies to focus on their disclosure of gender-related metrics and ultimately commit to improving gender diversity in their businesses.

Moneyweb