(Alliance News) - Trench coat maker Burberry Group PLC on Wednesday said it intends to raise an undisclosed amount through the issue of a sterling-denominated sustainability bond.
Proceeds of the bond sale will be used by Burberry to finance social and environmentally sustainable projects.
"This will be the first sustainability labelled bond issued by a luxury company and will diversify Burberry's sources of funding, introducing long-term financing into the company's capital structure," the retailer said.
Burberry said it intends to issue a benchmark-sized, medium-dated, sterling public sustainability bond, and it expects the bond to be rated Baa2 by Moody's.
Separately, Moody's confirmed the Baa2 credit rating of Burberry and its proposed notes, with stable outlook.
"Burberry's Baa2 ratings reflect the global high awareness of its brand, balanced geographic diversification, and conservative financial policies," says David Beadle, a Moody's vice president and lead analyst for Burberry.
"Although the coronavirus pandemic has substantially dented the group's trading and profits in the current fiscal year, Burberry's solid competitive position in China will enable the group to keep growing strongly there, mitigating continued weakness elsewhere and allowing the group to return to stronger credit metrics over the next twelve to eighteen months," he added.
Shares in Burberry were down 0.8% at 1,487.65 pence each in London on Wednesday morning.
By Tapan Panchal; tapanpanchal@alliancenews.com
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Burberry (BRBY)