NW Natural Holdings and NW Natural also close on sustainability-linked credit facilities
Northwest Natural Holding Company, and NW Natural Gas Company (NW Natural) recently closed on several sustainable financings as the Companies strive to continue supporting the energy transition and movement toward a sustainable economy.
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“Management’s Discussion and Analysis of Financial Condition and Results of Operations”
NW Natural successfully placed its first $130 million sustainable bond .The bond was issued under NW Natural’s new Sustainable Financing Framework. NW Natural expects to allocate an amount equivalent to the $130 million proceeds from the sustainable bond to refinance or finance NW Natural’s renewable natural gas investments and procurement; its sustainable and seismically secure headquarters building, which is LEED core and shell gold certified; energy efficiency programs; and purchases or support of minority-owned, women-owned, veteran-owned, LGBTQ-owned and/or small businesses.
“We are working to invest in and support a low-carbon energy future and a sustainable economy for our customers. With these financings, we’ve incorporated sustainability, a long-held focus of our company, into another important component of our business strategy,” said David H. Anderson, NW Natural Holdings president and CEO. “I’m proud to continue leading on sustainability and continuing our rich legacy of customer care, diversity, and environmental stewardship.”
The Companies’ sustainability strategy, which includes a goal to achieve 30% carbon savings by 2035 and a vision for being a carbon neutral energy provider by 2050, is described in their 2020 Environmental, Social and Governance Report.
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Sustainable Bond and Sustainable Financing Framework
NW Natural Holdings and NW Natural’s can each issue sustainable bonds under our Sustainable Financing Framework, with an amount equivalent to the proceeds of the bond issuance being used to finance or refinance projects related to renewable energy, energy efficiency, green buildings, and our supplier diversity program. The framework has been reviewed by Vigeo Eiris (V.E), an independent global provider of ESG research and analysis. V.E issued a second-party opinion confirming that the framework aligns with the four core components of the Sustainable Bond Principles 2021 and that investments in the eligible categories will lead to positive environmental and social impacts and advance the UN Sustainable Development Goals.
In line with sustainable standards, NW Natural has agreed to publish an annual report to track the financing of sustainable projects and their associated environmental and social impacts, where feasible. The framework, together with the V.E opinion, are available on NW Natural’s Sustainability webpage.
Lead underwriters included US Bancorp and CIBC with US Bancorp acting as the Sustainable Structuring Agent.
Sustainability-linked Credit Facility
On November 3, 2021, each of NW Natural Holdings and NW Natural amended and restated its revolving credit facility, resulting in the extension of the maturity date to November 3, 2026, and an increase in NW Natural Holdings and NW Natural’s total borrowing capacity to $600 million. The facilities can be extended for two additional one-year periods, subject to lender approval. The amendments include provisions that link each Company’s borrowing costs to an environmental metric related to NW Natural’s carbon savings goal of 30% by 2035 and a safety metric related to in-line inspections of NW Natural’s transmission pipeline.
The credit facility was provided by a syndicate of leading financial institutions. J.P. Morgan Securities LLC acted as the Sustainability Structuring Agent and JPMorgan Chase Bank, N.A. acted as the Administrative Agent. Bank of America, U.S. Bank, and Wells Fargo Securities, LLC served as additional Joint Lead Arrangers and Joint Bookrunners.
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