Colonial and its subsidiary SFL aim to reclassify all of their outstanding bonds as green bonds

  • The reclassification as green bonds will have no impact on the other characteristics of the bonds concerned, such as their terms and conditions, their interest rates or their maturity.

MADRID, January 12, 2022–(BUSINESS WIRE)–Regulatory news:

Colonial and its French subsidiary Société Foncière Lyonnaise (“SFL”) (Paris:FLY) have announced their intention to convert all of the outstanding bonds of Groupe Colonial (the “Group”) (representing an aggregate principal amount of 4.6 billion euros) in “green bonds”. With this objective, the Group led by Juan José Brugera and Pere Viñolas has prepared a Green Financing Framework (the “Framework”) to align the Group’s financing strategy with its sustainability objectives. The pillars of the Framework are energy efficiency and the prevention and reduction of carbon emissions from the Group’s assets. The Framework has been developed in accordance with ICMA’s “Green Bond Principles”, which promotes transparency, accuracy and integrity of information disclosed and reported by issuers and benefits from a second party opinion by VE

Green bonds are an alternative to raising corporate debt in an environment where corporate awareness of sustainability issues is becoming increasingly relevant. This type of debt is intended to finance “green assets” which are those that have a positive impact on the environment. The Group’s intention is that all bonds it proposes to issue in the future will be issued under the Framework as “green bonds” (subject to the availability of green assets at the time of issuance). such a show).

With regard to the Group’s outstanding bonds, issued by Colonial and its French subsidiary SFL, the Group intends to allocate an amount equivalent to the principal outstanding of these bonds to the financing or refinancing of a portfolio green assets that meet the environmental criteria further described in the Framework. To this end, the Group will ask bondholders to approve the reclassification of the “Use of proceeds” of these bonds from “General business functions” to “the financing or refinancing of a portfolio of eligible green assets” via a consent solicitation. The relevant bond meetings are scheduled for February 3, 2022.

To this end, the Group has mandated Crédit Agricole Corporate and Investment Bank and Freshfields Bruckhaus Deringer as advisors in this process. The requalification of the bonds in circulation as “green bonds” will have no impact on the other characteristics of the bonds concerned, such as their terms and conditions, their interest rates or their maturity.

Carmina Ganyet, Managing Director of Colonial, explained that “sustainability is a fundamental aspect of the group’s strategy and one of the growth vectors of the company to maximize shareholder value”. For Ganyet, the requalification of outstanding bonds into green bonds and the issuance of new green bonds in the future “represents a competitive advantage and an attractive investment for the capital markets, whose interest in this type of investment is in strong growth, as evidenced by the exponential growth of green and sustainable emissions”.

The Group actively manages its debt and in the first nine months of 2021, Colonial refinanced more than €1,000m, optimizing its average cost of financing, improving its diversified debt profile and the maturities of its borrowings. This “liability management” has enabled the Group to bring the cost of its debt below 1.5%. At the end of September 2021, the Group had net debt of €4,645m, of which €2,812m corresponded to bonds issued by Colonial and €1,290m to bonds issued by SFL, in addition to the €500m issued by SFL in October 2021. The Group’s Loan to Value as of September 30, 2021 amounts to approximately 37%.

A leading ESG property company in Europe

Colonial’s ESG strategy has been recognized for several years by the main entities in the field in Europe. Moody’s recently highlighted the group’s excellent ESG policy in its latest report on Colonial, noting the high governance standards and strong environmental credentials of its high-quality office properties and that the company’s credit outlook has improved from Baa2 stable to positive. Colonial currently has 93% of its office portfolio with sustainability certifications, a percentage well above the industry average in Europe, and has set itself the challenge of being emissions neutral by 2050.

Moody’s recognition of Colonial’s ESG policy adds to Colonial’s recent performance in major ESG indices. The international organization CDP (Carbon Disclosure Project) has awarded Colonial its highest grade “A” for its decarbonization policy. It should be noted that only 12 companies in the real estate sector in the world benefit from this rating, including 5 in Europe. The GRESB (Global Real Estate Sustainability Benchmark), the main ESG index of the real estate sector, ranked Colonial as the first office company in Europe, awarding it 94 points out of a possible 100. Similarly, VE placed Colonial in the top 3% of more than 4,800 companies analyzed each year.

Additionally, Colonial has been recognized by EPRA Sustainability Best Practices in 2021 for the sixth consecutive year.

About Colonial

The Colonial Group is a leader in the European prime office market, present in the main business districts of Barcelona, ​​Madrid and Paris with a prime office portfolio of approximately 1.6 million square meters and an asset value under management of more than 12,000 million euros. Colonial is a SOCIMI listed on the Spanish Stock Exchange.

About SFL

Leader in the prime segment of the Parisian commercial real estate market, Société Foncière Lyonnaise stands out for the quality of its portfolio, valued at €7,300 million and centered on the Central Business District of Paris ( , Edouard VII, Washington Plaza, etc.), and for the quality of its client portfolio made up of prestigious companies in the consulting, media, digital, luxury, finance and insurance sectors. The oldest property company in France, SFL demonstrates year after year an unfailing commitment to its strategy based on the creation of high usage value for users and, ultimately, substantial appraisal values ​​for its buildings. SFL is listed on Euronext Paris (Compartment A) and benefits from a BBB+ S&P rating with a “stable” outlook.

“The information contained herein should be read in conjunction with all publicly available information, in particular information available on Colonial’s website”

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