**Brazil**: Brazilian pulp and paper giant Suzano has finalised a $1.2 billion export prepayment agreement attached to a sustainability-linked loan, aimed at reaching reforestation goals critical for reducing interest rates while supporting biodiversity across Brazil’s ecosystems, including the Amazon and Atlantic Forests.
Brazilian pulp and paper conglomerate Suzano has secured a significant $1.2 billion export prepayment agreement that is associated with a sustainability-linked loan, which will allow the company to benefit from lower interest rates contingent upon achieving reforestation targets. This financial arrangement was established through a consortium of ten banks, with Chief Financial Officer Marcos Assumpção explicating that it represents “close to 10% of our net debt,” according to a report from LatinFinance.
The loan stipulates a financial spread of 1.45% over the Secured Overnight Financing Rate (SOFR) with an average duration of five years and a final maturity date set for 2031. The identities of the participating banks in this agreement have not been disclosed.
A noteworthy element of the agreement is its connection to Suzano’s environmental commitments. Should the company fulfil its reforestation objective of creating 500,000 hectares of reforestation corridors—designed to link disjointed tracts of native forest across Brazil’s diverse ecosystems, including the Cerrado savannah, Atlantic Forest, and Amazon biomes—its interest rate will be reduced by two percentage points. Conversely, should Suzano fall short of this target, the company would incur an additional two percentage points in interest. Assumpção commented on the performance indicators integral to this agreement, stating, “The key performance indicators (KPIs) here are the corridors that we are building between our forests. This is part of our long-term strategy of helping biodiversity.” He further clarified that reforestation could involve either native species or eucalyptus.
In terms of compliance and governance, Suzano has announced that the deal has been independently evaluated by S&P Global, ensuring alignment with sustainability standards as defined by the International Capital Markets Association.
This latest loan marks the second sustainability-linked financing Suzano has pursued; the company secured a $780 million sustainability-linked loan in March 2024 that was linked to targets focused on the reduction of greenhouse gas emissions.
In a related corporate development, Suzano disclosed the appointment of Malu Paiva to the role of executive vice president of sustainability, communication, and branding. Paiva’s new position follows the transition of Fernando Bertolucci to a board membership role, as confirmed in a press release circulated on Monday.
Source: Noah Wire Services
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