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  • Johnson Controls Plans More Green Bonds to Tap Growing Demand
    Bloomberg

    Johnson Controls Plans More Green Bonds to Tap Growing Demand

    (Bloomberg) -- Johnson Controls International Plc plans to sell more green bonds after first issuing the debt this month, predicting companies that borrow for environmentally friendly projects will be rewarded with lower funding costs.“The investment market is bound for some sort of disruption,” the company’s Treasurer, Marc Vandiepenbeeck, said in an interview. “People will want to see sustainable companies being rewarded differently than they have been so far.”The heating, ventilation and air conditioning equipment provider sold $625 million of green debt and wants to be a “much more frequent issuer,” he said, noting that the focus of younger investors on environmental, social and governance issues creates an opportunity for borrowers.Those joining the booming green bond market are increasingly seeing cost benefits. In the U.S., Verizon Communications Inc.’s recent green deal priced at lower yields than existing debt. In Europe, Volkswagen AG, Daimler AG and Orange SA sold bonds with environmental elements this month at significantly cheaper cost than their other notes.Johnson Controls was able to “shave off mid-to-high single digits” basis points on the cost of funds compared to non-green debt with its debut, according to Christophe Dugardyn, director of global capital markets at ING Financial Markets LLC, which was one of the lead managers of the sale. “We priced aggressively,” he said.Johnson Controls, which prior to this month had not issued new debt since 2017, opted for the green market to help expand its investor base. In addition, the securities support the company’s sustainability goals, which include cutting greenhouse gas emissions and energy usage.A Green CurveFuture green bond deals are likely to be of similar size to this month’s sale, given capital expenditure and refinancing needs, said Vandiepenbeeck. The Cork, Ireland-based firm with offices in Milwaukee intends to allocate an amount equal to net proceeds from the green issuance to fund eligible projects in categories like green buildings and sustainable water and wastewater management, according to its framework.More deals of different maturities and sizes would allow the company to create a green bond maturity curve over time, said Vandiepenbeeck. The dollar-denominated green sale was followed by a 1 billion euro bond in two tranches to refinance European debt coming due in the next 12 months.“My hope would be to be able to build a curve and be able to see what the net value is of those green and ESG focused investors, not just on the primary issuance but also on the secondary,” said Vandiepenbeeck.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Dividend Investors: Don't Be Too Quick To Buy Johnson Controls International plc (NYSE:JCI) For Its Upcoming Dividend
    Simply Wall St.

    Dividend Investors: Don't Be Too Quick To Buy Johnson Controls International plc (NYSE:JCI) For Its Upcoming Dividend

    Readers hoping to buy Johnson Controls International plc (NYSE:JCI) for its dividend will need to make their move...

  • The Zacks Analyst Blog Highlights: Whirlpool, Philips, Johnson Controls International and Unilever
    Zacks

    The Zacks Analyst Blog Highlights: Whirlpool, Philips, Johnson Controls International and Unilever

    The Zacks Analyst Blog Highlights: Whirlpool, Philips, Johnson Controls International and Unilever