Michelin signs €2.5b credit facility

Michelin has entered into a new 2.5-billion-euro revolving credit facility with a group of 19 banks. The agreement, signed by Compagnie Générale des Établissements Michelin and the banks on 16 October, replaces the existing 1.5-billion-euro facility dated 12 July 2011 and amended in 2012 and 2014. Michelin describes the new facility as a “back-up facility” that, jointly with the company’s euro commercial paper program, has been increased to take the group’s growth into account.

The new credit facility has a three-year tenor and incorporates two one-year extension options at each lender’s discretion. It comes with an CSR clause that links its pricing to a set of Sustainability Performance Targets material to the company’s business and important to its stakeholders. These are: Percentage of engagement of the group’s employees; reduction of Scope 1 and 2 greenhouse gas emissions; reduction of Michelin’s sites’ environmental impact.

JP Morgan, Morgan Stanley, NatWest, Sumitomo Mitsui Banking Corporation and Unicredit are acting as mandated lead arranges for the facility.

Depending on the number of Sustainability Performance Targets achieved, an increase or a discount will be applied to the facility’s margin. Michelin explains that this underlines its commitment towards the notion that “in the Michelin of tomorrow everything will be sustainable.”

The syndication was successfully launched on 14 September 2020, and closed largely oversubscribed. Michelin comments that this demonstrates “a very positive valuation of the Michelin Group’s credit risk by the market.”

The final syndicate stands as follows:

Mandated Lead Arrangers & Bookrunners:

BNP Paribas (mandated as Documentation Agent)
HSBC France (mandated as Facility Agent and ESG coordinator)
Banco Santander
Citi
Crédit Agricole Corporate and Investment Bank
Deutsche Bank
Natixis
Société Générale Corporate & Investment Banking
The Bank of Tokyo Mitsubishi UFJ

Arrangers:

Bank of America Merril Lynch
Bank of China
CM-CIC
Industrial and Commercial Bank of China
Mizuho Corporate Bank