Water technology company Xylem has successfully closed its inaugural green bond offering of $1-billion in senior unsecured notes.
The bond, which received interest from the market, comprised $500-million in 1.95% senior notes due in January 2028 and $500-million in 2.25% senior notes due in January 2031, expanding liquidity and funding capacity at attractive rates.
Aligned with Xylem’s Green Finance Framework and the United Nations Sustainable Development Goals, the proceeds will fund green projects that help improve water accessibility, water affordability and water systems resilience.
“Solving the world’s toughest water challenges already puts sustainability at the heart of our business, and this bond offering brings sustainability to the centre of our funding strategy,” said Xylem CFO Mark Rajkowski, adding that the successful offering enhances the company’s robust liquidity position and maximises flexibility in an evolving macroeconomic environment.
The eligible projects targeted for investment include ecoefficient- and circular economy-adapted products, production technologies and processes and solutions that advance sustainable water and wastewater management, including communities’ resiliency against the impacts of climate change.
“Technology is playing an increasingly important role in solving water issues and stewarding society’s shared water resources,” said Xylem general counsel and chief sustainability officer Claudia Toussaint.
Environment, social and governance and corporate governance research and ratings provider Sustainalytics reviewed Xylem’s Green Finance Framework and provided a second party opinion.
Xylem’s 2025 sustainability goals include saving more than 16.5-billion cubic metres of water through the use of advanced technologies; preventing over seven-billion cubic metres of polluted water from flooding communities or entering local waterways; reducing the carbon dioxide footprint associated with the water cycle by over 2.8-million metric tonnes; using 100% renewable energy and 100% process water recycling at its major facilities; and providing access to clean water and sanitation solutions for at least 20-million people living at the base of the global economic pyramid.
In addition to its yearly Sustainability Report, Xylem will, every year, report on the allocation of the proceeds of this offering and on the impact of the portfolio of eligible projects until the proceeds of the green financing are fully allocated.
ING served as sole green structuring advisor, while BNP Paribas Securities, Citigroup Global Markets, JP Morgan Securities and ING Financial Markets served as joint active book-running managers.
Wells Fargo Securities served as passive bookrunner.
This is the second sustainability-driven financing completed by the company, which previously executed an $800-million revolving credit facility with a sustainability-linked pricing mechanism in March 2019.