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The company announced its pricing on Monday, Oct. Like its peer consumer staples titans, PepsiCo is a frequent issuer of debt, which it uses for capital investments and other plain-vanilla purposes.
However, this newest debt offering is unique for PepsiCo in that it represents the organization's first "green bond. Of these priorities, which are aligned with U.
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Sustainable Development Goals or SDGs, the sustainable plastics and packaging effort seems the most ambitious. The company has appointed its first-ever chief sustainability officer to allocate the green investments across the three overarching priorities. Executive Simon Lowden will lead PepsiCo's Sustainability Office, which oversees global teams in sustainable plastic use and sustainable operations. The issuance of a green bond signals CEO Ramon Laguarta's commitment to improving PepsiCo's environmental, social, and governance ESG bona fides alongside the more traditional tasks of meeting financial benchmarks and investor expectations.
Does issuing debt for sustainability initiatives confer any special financial advantage to PepsiCo? I don't see evidence of any positive or negative impact from the particular flavor of this borrowing. The notes' term agreement, an exhibit to Wednesday's filing, reveals that PepsiCo's relatively attractive coupon rate represents a basis-point spread over the prevailing long-term U.
Treasury rate on the date of offering Oct. More than any other factor, this advantageous interest rate is a function of the organization's solid balance sheet and investment-grade rating; moreover, characteristics of the transaction are in line with other recent borrowings detailed in the notes to PepsiCo's most recent annual report. Over time, however, the green bond can both achieve the desired ESG outcomes and provide meaningful if difficult-to-quantify financial benefits.
PepsiCo undoubtedly hopes to attract a certain type of shareholder to the "PEP" symbol through this action. Typically, changes to a company's capital structure i. Through video tutorials, Gwendolyn offers step-by-step instructions on how to fix common problems with popular smartphones and other electronics.
This work can reduce toxic waste in landfills from electronics. When a device needs to be replaced, be sure to eCycle.
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According to the Environmental Protection Agency, for every 1 million smart phones recycled, 35, pounds of copper, pounds of silver, 75 pounds of gold and 33 pounds of palladium can be recovered and reused. Learn more by watching this Climate Lab video. Want to read more stories like this? News about conservation, straight to your inbox.
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