Bridgestone Americas takes sustainability-linked credit

Bridgestone Americas has executed a US$1.1 billion sustainability-linked credit facility in partnership with Sumitomo Mitsubishi Banking Corporation (SMBC). Under this credit facility, the costs that Bridgestone incurs in relation to its borrowings will decline or rise in line with independent appraisals of its sustainability.

The tyre maker explains that the credit facility’s financing features a sustainability-linked pricing adjustment mechanism that determines the interest rate that Bridgestone must pay based on the company’s Environmental, Social and Governance (ESG) Risk Rating calculated by Sustainalytics, as well as the ESG rating of FTSE Russell. Both are leading independent providers of environmental, social and governance ratings. The pricing adjustment mechanism will reduce Bridgestone’s borrowing costs as its sustainability ratings improve. Bridgestone notes that the sustainability mechanism was structured “in accordance with the Sustainability-Linked Loan Principles promulgated by the syndicated loan market industry associations.”

Reinforcing a commitment to sustainability

“Sustainability is at the centre of our company’s mission to realise innovations that improve the way people move, live, work and play, “said Paolo Ferrari, president and chief executive officer of Bridgestone Americas, Inc. “We will continue to take bold steps to fulfil our commitment to our customers and to society as we endeavour to be a world-leading sustainable solutions company.”

Bridgestone states that the credit instrument underscores its commitment to sustainable business practices and complements its 2050 Vision to become a sustainable solutions company that provides social and customer value. “This committed credit facility reinforces our commitment to sustainability by linking the rate structure of the facility to independent assessments of our continued efforts to advance Bridgestone’s sustainability practices,” adds Jose Anes, vice president and corporate treasurer of Bridgestone Americas.

“SMBC is excited to help our partners at Bridgestone Americas further elevate their position and stake as a sustainability leader in the tire industry through this revolving credit facility,” says Hiro Hyakutome, chief executive officer and head of SMBC Americas Division. “Our deep and well-recognised expertise in green loans and sustainability-linked loans helps our global clients achieve their near- and longer-term ESG objectives. We look forward to continuing to help support Bridgestone’s sustainability initiatives.”