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Repsol successfully issued its inaugural sustainability-linked bond

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Following November’s 2020 release of Repsol’s 2021-2025 Strategic Plan, on June 14, the company has presented its innovative, comprehensive, and overarching “Transition Financing Framework” to accompany its energy transition strategy and commitment to become a net zero emissions company by 2050.


The Framework gives Repsol the flexibility on potential financing instruments (Bonds and/or Loans) and formats:

  • Use of Proceeds format (green and transition) providing transparency on assets and investments and/or
  • Sustainability-Linked format granting a dynamic and holistic dimension on the company progress towards net zero emissions.


Moreover, for the first time in the O&G sector, the Framework incorporates the applicable recommendations from the ICMA Climate Transition Finance Handbook. Finally, the Framework benefited from ISS second party opinion (“SPO”) confirming its alignment with market standards and affirming the positive contribution of Repsol green and transition projects, and the ambition of the sustainability performance targets.


After a series of investors meetings to present its Transition Financing Framework, Repsol successfully issued its first sustainability-linked bond, a 8yr and 12yr dual tranche transaction of €1.25bln (€650m and €600m for each tranche respectively). The transaction gathered combined demand for approx. €2.75bn, allowing both tranches to be reviewed on the initial price guidance down to a final reoffer spread offered to investors of MS + 50bp and MS + 70bp both in the 8yr and 12yr references.


The bond financial characteristics are tied to the performance of the company's Carbon Intensity Indicator, a proprietary KPI developed by Repsol to measure its CO2e emissions per unit of energy produced by the company (g CO2e/MJ). It includes scope 1, 2 & 3 GHG emissions. There is one sustainability performance target (“SPT”) for each tenor:

  • 12% reduction by 2025 for the 8yr tranche, triggering a 25bps per annum coupon step up that would apply on the last 3 interest periods if missed, and
  • 25% reduction by 2030 for the 12yr tranche, triggering a 37.5bps per annum coupon step that would apply on the last 2 interest periods up if missed.

It is worth mentioning that this is the first time in the O&G sector where the selected KPI for a bond includes scope 3 GHG emissions.


Natixis has been accompanying Repsol through the process as Sustainability Structuring Advisor and Global Coordinator.

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