Barloworld brings first gender-linked bond to market

23 Aug 2022

Industrial powerhouse Barloworld has listed two gender bonds on the JSE in a bid to increase female participation in its leadership structures and supply chain.

The company hopes to raise R1.1-billion from the sale of the three-year and five-year bonds, to be used to finance the company’s women empowerment goals such as boosting discretionary procurement spend on black women suppliers to reach or exceed 15% of its total procurement spend. Barloworld also aims to reach or exceed 50% female representation in its leadership by 2025.

Valdene Reddy, the JSE’s director of capital markets, says she hopes that more issuers will follow the lead of Barloworld and list gender-linked bonds on the JSE to support women empowerment and gender equality.

“The gender bond issued by Barloworld brings the number of sustainability instruments listed on the JSE’s Sustainability Segment to 47, raising the segment’s market capitalisation to over R26.2-billion,” she says.

The JSE launched the Sustainability Segment two years ago to provide a platform for companies to raise debt for green, social and other sustainable initiatives. The segment makes it easier for companies to list and trade sustainability-related instruments to raise funds for activities directed at sustainable development.

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Relebohile Malahleha, Executive Strategic Finance and Treasury at Barloworld, says the landmark transaction highlights the company’s commitment to gender equity, a key enabler for poverty alleviation, and to ensure that the greater part of society is economically active.

RMB, which acted as arranger and sustainability coordinator, worked closely with Barloword to establish a gender-linked bond framework that will enable the company to issue similar instruments in future, in line with the gender strategy. The framework was externally verified to confirm its alignment with international capital market associations’ sustainability-linked bond principles.

“Notably, the gender-linked bonds are competitively priced compared to Barloworld’s traditional bonds, which is typical of funding raised for sustainability-focused debt instruments. This instrument delivers a pricing benefit and is a great demonstration of how to align an issuer’s financial strategy with its sustainable strategy.

“This transaction sets the benchmark for other corporates and will (hopefully) encourage companies to focus on their disclosure of gender-related metrics and ultimately commit to targets for improvement in gender diversity,” says Trishalia Naidoo of RMB’s debt capital market team. BM/DM

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