What is unique about the recent sustainable bonds issued by JSW Steel?

JSW Steel, part of the Sajjan Jindal group, has raised $1 billion via issuance of sustainability-linked bonds in the overseas market in US dollars. JSW Steel is the first steel company in the world to issue SLBs in hard currency with fairly stringent sustainability conditions. The company has even confirmed that the response from global investors had been overwhelming, considering the green nature of these bonds and ESG compatibility.

The proceeds of this $1 billion bond issue will be deployed for funding capital expenditure and to refinance debt. However, being sustainability bonds, the company has committed to progressively achieve sub-1.95 tonnes of CO2 per ton of steel (carbon dioxide emissions) by 2030. If JSW fails to meet this target, then the coupon interest payable on these bonds will be automatically escalated by 37.50 bps as a penal payment.