August 26, 2021
Mayer Brown advises Southwire on $1 billion sustainability-linked asset based loan facility
Mayer Brown advised Southwire Company, LLC (Southwire), one of North America’s largest wire and cable producers, on the renewal of its five-year, $1 billion asset based loan (ABL), which now links the company’s borrowing costs directly to its progress in achieving its sustainability targets. Under the terms of the renewed facility, loan pricing and fees are adjusted based on Southwire’s progress towards eliminating or offsetting its greenhouse gas emissions.
The structure of the facility allows Southwire to maximize the flexibility of its working capital, minimize its short-term-asset cost-of-carry and enhances its day-to-day management of commercial activities. Linking the facility’s pricing and fees to the attainment of the company’s sustainability goals, aligns the company’s strategic growth initiatives with its goal of becoming carbon neutral from its operations by the end of 2025.
Southwire is among the first companies globally to establish a sustainability-linked ABL facility and involved ten of the company’s banking partners, including joint lead arrangers Wells Fargo Bank, N.A.; BMO Capital Markets; BofA Securities Inc.; and JPMorgan Chase Bank, N.A. Additionally, BofA Securities Inc. served as the Sustainability Coordinator.
The Mayer Brown team included Banking & Finance partners Fred Fisher, Chris Chubb, Brad Keck (all Chicago), Peter Raish (Houston) and Gaby Sakamoto (DC), and associates Brian Kent and Jake English (all Chicago); and Litigation & Dispute Resolution partner Marcus Christian (DC), who was the relationship partner.
The structure of the facility allows Southwire to maximize the flexibility of its working capital, minimize its short-term-asset cost-of-carry and enhances its day-to-day management of commercial activities. Linking the facility’s pricing and fees to the attainment of the company’s sustainability goals, aligns the company’s strategic growth initiatives with its goal of becoming carbon neutral from its operations by the end of 2025.
Southwire is among the first companies globally to establish a sustainability-linked ABL facility and involved ten of the company’s banking partners, including joint lead arrangers Wells Fargo Bank, N.A.; BMO Capital Markets; BofA Securities Inc.; and JPMorgan Chase Bank, N.A. Additionally, BofA Securities Inc. served as the Sustainability Coordinator.
The Mayer Brown team included Banking & Finance partners Fred Fisher, Chris Chubb, Brad Keck (all Chicago), Peter Raish (Houston) and Gaby Sakamoto (DC), and associates Brian Kent and Jake English (all Chicago); and Litigation & Dispute Resolution partner Marcus Christian (DC), who was the relationship partner.
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