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MarketScreener Homepage  >  Equities  >  Bolsa de Valores de Sao Paulo  >  Suzano S.A.    SUZB3   BRSUZBACNOR0

SUZANO S.A.

(SUZB3)
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Suzano S A : Emissions-linked Suzano bond seen spurring more EM firms to market

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09/11/2020 | 01:31pm EDT

* Sustainability-linked bond only the second to hit market

* The first for an emerging market-based company

* $750 mln issue well over-subscribed, with bids of $6 bln

LONDON, Sept 11 (Reuters) - Brazilian pulp and paper producer Suzano's recent oversubscribed $750 million carbon emissions-linked bond - the first of its kind for an emerging market firm - will likely spur others to tap strong demand from environmentally focused investors, analysts said.

The dollar-denominated issue, which priced late Thursday and attracted bids of more than $6 billion and a yield of 3.95%, is a so-called Sustainability Linked Bond (SLB), tied to Suzano cutting its greenhouse gas emissions by 15% over ten years.

Should the firm fail to be on track to reach the target by 2026, it will have to pay an additional 25 basis points on its coupon.

Bankers said the bond's coupon - the lowest across the firm's dollar debt trading in secondary markets - reflected strong interest from investors focused on environmental, social and governance-related matters and general confidence in the investment grade rated issuer.

"The combination worked very well in attracting strong demand from the U.S., Europe and Asia," said a banker involved with the deal.

Suzano is only the second issuer to sell a bond under the SLB structure, after Italian energy firm Enel pioneered it with its own issue in late 2019.

While green finance structures tend to link the money raised to fund specific environmentally-focussed projects, the SLB can be tied to environmental goals at the company level.

"Emerging markets can be encouraged in their environmental progress through a number of instruments, of which transition or sustainable linked bonds are certainly part of that process," said Geraint Thomas, head of green loans and bonds in EMEA at MUFG.

Despite the increasing amount of money chasing bonds such as Suzano's, some investors have flagged concerns, including the ambition of the pledges made by companies looking to raise money and the degree of independent oversight of their performance. (Editing by Mark Potter)


Stocks mentioned in the article
ChangeLast1st jan.
ENEL S.P.A. -0.86% 7.45 Delayed Quote.6.26%
SUZANO S.A. -1.32% 50.02 End-of-day quote.26.06%
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Financials
Sales 2020 29 673 M 5 290 M 5 290 M
Net income 2020 -15 128 M -2 697 M -2 697 M
Net Debt 2020 66 712 M 11 894 M 11 894 M
P/E ratio 2020 -4,41x
Yield 2020 0,09%
Capitalization 67 488 M 12 014 M 12 032 M
EV / Sales 2020 4,52x
EV / Sales 2021 3,76x
Nbr of Employees 35 000
Free-Float 41,1%
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Technical analysis trends SUZANO S.A.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 12
Average target price 56,21 BRL
Last Close Price 50,02 BRL
Spread / Highest target 35,9%
Spread / Average Target 12,4%
Spread / Lowest Target -36,0%
EPS Revisions
Managers
NameTitle
Walter Schalka Chief Executive Officer
David Feffer Chairman
Marcelo Feriozzi Bacci CFO & Director-Investor Relations
Fernando de Lellis Garcia Bertolucci Executive Officer-Research & Development
Christian Orglmeister Executive Officer-People Management, Strategy & IT
Sector and Competitors
1st jan.Capitalization (M$)
SUZANO S.A.26.06%12 263
UPM-KYMMENE OYJ-15.82%16 415
STORA ENSO OYJ5.40%12 859
SVENSKA CELLULOSA23.74%9 459
HOLMEN AB18.23%6 406
EMPRESAS CMPC S.A.-6.52%5 463