BNP Paribas, a premier global bank, announced that it has closed a sustainability-linked loan (“SLL”) with JetBlue Airways via an amendment to its existing Senior Secured Revolving Credit Facility. JetBlue has amended its existing $550 million Senior Secured Revolving Credit Facility by including a “sustainability-linked” provision to align its strategic initiatives with its environmental, social, and governance performance (ESG) goals and objectives. BNP Paribas assisted the Company as the sole Sustainability Structuring Agent in this effort.
This SLL includes a pricing mechanism related to the applicable margin and commitment fee, which is then linked to the Company’s ESG score provided by Vigeo Eiris, an international provider of ESG research and services for investors and organizations.
“Our owners, many of whom are also crewmembers, want to see how ESG initiatives are connected to our financials. As the first airline to accomplish this type of transaction, we are directly linking our commitment to addressing environmental and social issues with our bottom line. We are proud of what we have accomplished, but also understand we have more to do in reducing our carbon footprint and meeting the needs of our stakeholders,” said Sophia Mendelsohn, Chief Sustainability Officer for JetBlue.
In 2018, JetBlue started to formally review its financial partners’ sustainability strategy and commitments, shifting business to financial partners with stronger ESG policies themselves. Last year, BNP Paribas also helped the Company move to Sustainable Cash Management by creating tailor-made solutions that meet the airline’s ESG and treasury guidelines.
In 2020, JetBlue was the first U.S. airline to announce that it would operate carbon neutral on all domestic flights by offsetting emissions from jet fuel, ramping up to eliminate more than 17 billion pounds of CO2 emissions per year. JetBlue will also start flying with sustainable aviation fuel (SAF) on flights from San Francisco. SAF has up to an 80% smaller carbon footprint versus regular jet fuel. In addition, JetBlue has previously placed orders for 70 Airbus A220s powered by Pratt & Whitney Geared Turbofan (GTF) PW1500G fuel-efficient engines reducing emissions per seat by 40%.
“We couldn’t be happier to continue our partnership with JetBlue as the Company progresses on its sustainability journey. JetBlue’s SLL is just one element of the airline’s comprehensive ESG and sustainable finance strategy, which is incredible to see. As a leader in sustainable finance, BNP Paribas is dedicated to working with our corporate clients to identify tailored solutions that align with their specific efforts and commitments toward achieving their ESG goals,” said Florence Pourchet, Co-Head of Global Banking Americas at BNP Paribas, who also oversees the Bank’s Sustainable Finance strategy in the Americas.
BNP Paribas has acted as Sustainability Coordinator or Sustainability Structuring Agent for many sustainable finance transactions. Earlier this month, the Bank closed the first sustainability-linked syndicated credit facility in Canada with WSP Global, one of the world’s leading professional services firms, and last month closed a bi-lateral, incentive-linked corporate RCF with Brookfield Renewable Partners in Canada, one of the first SLLs offered in Canada.