(Bloomberg) – AP Moller-Maersk A / S, the world’s largest container shipping company, has issued its first-ever green bond in a sale that has generated more interest than any on the European credit market this week.
The deal represents a significant milestone for an industry that still relies heavily on fossil fuels for its operations. Copenhagen-based Maersk has raised 500 million euros ($ 566 million) at a record 0.75% coupon, she said on Friday. This is the first time since 2018 that the company has turned to the euro market for debt financing.
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Maersk has made it clear that it wants to move faster than its competitors in decarbonizing its business, as investors begin to divert capital from climate laggards. The company plans to spend the proceeds from Friday’s bond sale on a small supply vessel and eight large methanol-powered vessels ordered earlier this year.
Niclas Erlandson, head of treasury and risk at Maersk, said future green deals will gradually help wean the business off fossil fuels. “We have the ambition to continue to develop our green bond portfolio,” he told Bloomberg. The company plans to “assess each individual show on a case-by-case basis,” he also said.
Chief Executive Soren Skou said this month that Maersk would likely be able to achieve carbon neutrality earlier than its current target for 2050. He plans to notify shareholders of a new emissions schedule in March.
Maersk currently consumes around 12 million tonnes of marine oil per year, which is roughly equivalent to all the oil produced in the world in a single day. Skou says the shipping industry should be able to manage a transition to ships running on methanol or ammonia rather than hydrocarbons, a change estimated to add 10 to 12 percent to transportation costs.
Maersk’s green bond framework received a âmedium green shadowâ and an âexcellentâ governance rating by Cicero Green, the company said.
CFO Patrick Jany told Bloomberg in May that Maersk may make green finance the basis of its debt program going forward. He also noted that Maersk’s cash flow means he doesn’t need the money. Net profit in 2021 is expected to reach around $ 17 billion, analysts estimate, nearly five times higher than in 2020.
âYou don’t have to take on new debt,â Erlandson said. “The timing of the issue is tied to the investments we make in our decarbonization journey, which reflects the company’s strategy for the future, rather than current market conditions.”
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