Delivery Giant SF Holding Issues $77 Million in ‘Carbon Neutrality Bonds’

What’s new: Chinese logistics giant SF Holding Co. Ltd. (002352.SZ) issued 500 million yuan ($77 million) worth of “carbon neutrality bonds,” becoming the first private Chinese firm to do so.

The bonds, with lead underwriters CSC Financial Co. Ltd. and Citic Securities Co. Ltd., mature in three years and have a coupon rate of 3.79%. They were oversubscribed by a factor of 2.3.

SF Holding said it plans to use at least 70% of the proceeds to repay green construction loans obtained for its headquarters, while the rest will replenish the company’s working capital.

The background: Carbon neutrality bonds are a type of debt financing instrument that may only be used for projects that help to reduce carbon emissions.

The SF Holding release marks the first time a private Chinese company has issued carbon neutrality bonds since state-owned enterprises began the first tranche of similar issuances in February.

China has pledged to bring its carbon dioxide emissions to a peak by the end of the decade and reduce them to net zero by 2060.

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Contact reporter Matthew Walsh (matthewwalsh@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)

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