NEW YORK, U.S. — Rabobank and Mercon announced that the company has closed on a $450 million sustainability-linked senior secured revolving credit facility led by Rabobank. It is the first such facility for commodity trading in the U.S. and the only coffee-specific sustainability facility globally.
The pricing on this facility is linked to key sustainability initiatives measured by performance indicators and is aligned with Mercon’s long-term strategy of building a better coffee world. It is also consistent with Rabobank’s global sustainability focus through its Kickstart Food program.
“This transaction is an embodiment of our mission of Growing a Better World Together,” said Karel Valken, Rabobank’s Global Head of Trade and Commodity Finance Agri. “As the world’s leading food and agricultural financier, we’re always looking for opportunities to address crucial sustainability issues.”
“As a group, we are extremely proud to be part of this groundbreaking 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 at Mercon.
Pricing on the facility could be discounted or have a premium applied based on compliance with the sustainability performance indicators. Any discount will be disbursed to Mercon’s sustainability initiative or programs such as the LIFT sustainability production program or Seeds for Progress Foundation. 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.
The LIFT Program was started in Nicaragua for coffee farmers and has expanded to Guatemala, Honduras, Brazil and Vietnam. The goals of the program are to improve productivity levels, ensure positive environmental and social impact, and raise the living standards of coffee communities in the region.
“This new partnership will allow us to advance in some of the most relevant sustainability areas that benefit farmers where they need it the most,” said Juan Pablo Ibarra, Chief Operating Officer at Mercon.
Netherlands-based Mercon is a vertically integrated global green coffee supplier and has companies in nine countries. The new two-year credit facility, which replaces the company’s existing facility, is led by Rabobank.
“We couldn’t be happier with the results of this transaction. The company now has a solid group of 13 relationship banks, including ING Capital LLC, Macquarie Bank, Credit Suisse (Switzerland), UBS Switzerland, BNP Paribas and International Finance Corporation,” said Nader Pasdar, Rabobank’s Head of Markets North America. “This transaction is a great example of how aligning our sustainability principles with that of our clients can ultimately bring financial benefits to them.”