Record amount of green bonds issued at HELL ENERGY
Hungary’s leading energy drink, iced coffee and iced tea producer, HELL ENERGY Hungary Ltd, successfully issued HUF 67 billion nominal value green bonds in the framework of the Hungarian National Bank’s Development Bond Program (NKP).
HELL Group successfully closed the largest ever Hungarian green bond auction
Hungary’s leading energy drink, iced coffee and iced tea producer, HELL ENERGY Hungary Ltd, successfully issued HUF 67 billion nominal value green bonds in the framework of the Hungarian National Bank’s Development Bond Program (NKP). HELL ENERGY is planning to spend the funds raised through NKP’s so far largest* green bond issue to finance its investment project announced to be nearly HUF 80 billion, during which it is planning to implement capacity expansions conforming with green goals in Szikszó in the next two years.
The 10 year fixed interest bond accrues 10% starting from the 5th year, and when it matures it pays 50% interest in a single sum. The record amount of green bonds were significantly oversubscribed during the auction; The average yield came out to be 2.8%.
From the funds obtained through the bond issue, among other things, HELL ENERGY is planning to expand its filling capacity and its Quality Pack aluminum can manufacturing factory to satisfy increasing demand for its products filled into eternally recyclable aluminum cans. It is planning to construct a 700 meters long 78,000 square meter new building complex, at one end of which it is planning to install an aluminum can production line, at the other end new bottling lines, while the warehouses in the middle will connect the two factory units. After the new capacities will be put into operation, planned for 2023, HELL ENERGY will be able to produce almost an annual 3 billion nonalcoholic aluminum can products at its Szikszó factory complex.
From an environmental and sustainability aspect the operation of HELL ENERGY is unparalleled in the world. On top of the fact that today over 95% of their products are available in eternally recyclable aluminum cans – which is exponentially better from a sustainability aspect than PET bottles – it powers its zero waste production facilities with renewable energy, providing large international soft drink companies with an example to follow, as a Hungarian company.
„The volume of our fundraising is comparable to the issues of large international companies traded on Budapest Stock Exchange, thus we can state that HELL ENERGY has risen to a new level. Our green bond framework was certified by Sustainalytics, the world’s leading ESG (environmental, social and governance) Qualification Company, so an independent expert qualification certifies our sustainability and environmental strategy. The funds raised through the so far largest amount of green bonds issued under the NKP will be used to finance the production of beverage products adjusted to the circular economy and sustainable production technologies” – assessed Barnabás Csereklye, the managing director of HELL ENERGY.
The transaction was supported by Erste Bank Hungary Zrt as an investment service provider, Deloitte as a financial consultant and the Law Office of Erdős I Katona as a legal consultant.
„The significant interest for the bonds, the achieved favorable financing cost, and the total volume of HUF 100 billion together with the first bond series all show that from the viewpoint of investors the company group is on the level of multinational capital market players. We are proud to have supported both successful issues as an investment service provider” – explained Mihály Geiszbühl, Head of Money and Capital Marketsof Erste Bank Hungary Zrt.
László Pósfay, Director of Deloitte’s Financial Consultancy business branch said in connection with the bond issue: „With its second bond issue HELL has performed one of the largest volume fundraisings within the NKP program. Their carefully compiled strategy and future business prospects supported by their continuously improving performance in the past has been validated by the rating agencys and investors. We are glad that we could contribute to the success of the HELL Group as financial consultants again, after the previous debt restructuring and bond issue.”