Telefónica Deutschland signs Sustainability-Linked Loan

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  • First German telecommunications company with "sustainable" syndicated loan
  • Margin linked to ESG rating

Credits: Telefónica Deutschland / Karsten Pawlik
O2 Tower in Munich
Telefónica Deutschland concluded a so-called "Sustainability-Linked Loan" in the amount of 750 million euros via its subsidiary Telefónica Germany GmbH & Co. OHG. The interest margin is linked, among other things, to the fulfillment of ESG criteria (ESG = Environment, Social and Governance) in the areas of environmental and climate protection, social commitment and corporate management. This is based on an independent annual sustainability rating prepared by Sustainalytics, a leading provider of sustainability ratings. The Loan, which runs until the end of 2026, including extension options, prematurely replaces a facility of the same amount which runs until March 2023. “Once again, Telefónica Deutschland is a pioneer in the use of innovative financial products in the industry. By linking financing costs to our ESG rating, we underscore our efforts to make sustainable management a central criteria in all our corporate decisions," says Markus Rolle, Chief Financial Officer and member of the Management Board of Telefónica Deutschland Holding AG.

Valentina Daiber and Markus Rolle
Telefónica Deutschland with its core brand O2 is involved in ESG's key areas: "Responsible management", "Strengthening life in the digital world" and "Protecting the environment and climate". The central steering tool is the Responsible Business Plan 2020, which was launched in 2016. Next year, the plan will be continued with ambitious targets up to 2025. The company publishes further information on the status of target achievement in the current CR Report. "We are the first German telecommunications company to link a credit line to the fulfilment of sustainability criteria," explains Valentina Daiber, Chief Officer for Legal and Corporate Affairs and member of the Management Board of Telefónica Deutschland Holding AG. "This decision is an important component of a long-term, planned and monitored sustainability strategy that encompasses environmental, social and governance impacts in equal measure". Like the previous loan, the transaction was issued by BNP Paribas, Commerzbank and UniCredit as Bookrunner and Mandated Lead Arranger. UniCredit also acted as Sustainability Structuring Agent and Coordinator.