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Mercon becomes first trader to close a U.S. sustainability linked Credit Facility

MANAGUA, Nicaragua – Mercon announced that it closed a US$450 million Sustainability Linked Senior Secured Revolving Credit Facility, the first in commodity trading in the U.S. and the first coffee-only sustainability facility globally. The pricing on this Facility is linked to key sustainability initiatives measured by performance indicators.

Mercon’s purpose to build a better coffee world is the center of its long-term strategy. The Company has successfully expanded its sourcing channels primarily by developing its own sustainability production program called LIFT.

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The LIFT Program, which was first implemented in Nicaragua for coffee farmers, is an integrated system of service tools including: training and technical assistance on best agricultural practices, farm business management, climate smart agriculture, best socio-environmental practices in alignment with the Rainforest Alliance, support to renovation, access to capital and financial risk management and community development.

Through LIFT, farmers also contribute to the mission of Seeds for Progress Foundation to promote quality education in coffee growing communities.

The results of LIFT include improving levels of productivity, ensuring positive environmental and social impact, and most importantly, raising the living standards of coffee communities in the region. Due to the success in Nicaragua, the LIFT program today has expanded to Guatemala, Honduras, Brazil and Vietnam.

Mercon is also a member of the UN Global Compact and reports annually on its Corporate Responsibility and Sustainability following the GRI Sustainability Reporting Standards (GRI Standards). These are the first global standards for sustainability reporting and represent the global best practice for reporting on a range of economic, environmental and social impacts.

“As a Group, we are extremely proud to be a part of this ground-breaking Facility which allows us to reaffirm our commitment to source and deliver the right quality of coffee and to do so while adding value to everyone in the supply chain,” said Oscar Sevilla, Chief Executive Officer, Mercon Coffee Corporation.

Based on the progress on the sustainability performance indicators, a discount or premium may apply to the pricing on the Facility. Any discount will be disbursed to a sustainability initiative or program selected by the Company including the LIFT program or Seeds for Progress Foundation and any premium will be disbursed to similar programs sponsored by Rabobank as the Sustainability Structuring Agent and ING Capital LLC and BNP Paribas as Sustainability Coordinators. International Finance Corporation is also a Sustainability Coordinator.

“This new partnership will allow us to advance in some of the most relevant sustainability areas which benefit farmers where they needed the most” said Juan Pablo Ibarra, Chief Operating Officer, Mercon Coffee Corporation. Leonardo Morales, Chief Financial Officer, Mercon B.V. added “We appreciate the support we have received from widely recognized institutions as it serves as indisputable recognition of Mercon’s embedded strategic focus on sustainability”.

The new two-year credit Facility, which replaces the Company’s existing Facility, is led by Rabobank and provided by an international syndicate of 13 relationship banks, including ING Capital LLC, Macquarie Bank, Credit Suisse (Switzerland), UBS Switzerland, BNP Paribas and International Finance Corporation.