Rabobank led a $500 million sustainability-linked senior secured revolving credit facility for Mercon Coffee Group, a coffee supplier based in the Netherlands.
The transaction refinances an existing facility with pricing linked to key sustainability initiatives measured by performance indicators. The new facility consists of a $250 million origin tranche to finance assets in Mercon Coffee Group’s coffee growing origin countries, including Nicaragua, Brazil, Guatemala and Honduras, and a $250 million destination tranche to finance assets in countries coffee is destined to be delivered, including the U.S. and countries in Europe.
“As the world-leading food and agricultural financier, sustainability and innovation are key strategic drivers,” Karel Valken, global head of trade and commodity finance agriculture at Rabobank, said. “Financing coffee and improving the livelihood of smallholder farmers are at the heart of our business and we are very proud to have a shared commitment with Mercon to drive change. This facility is underscoring our mutual ambitions and is unique in its structure.”
“Mercon strives to create long-term benefits that reach far beyond the supply chain,” Juan Pablo Ibarra, COO of Mercon Coffee Group, said. “The result of our efforts leads to an inclusive sector that supports sustained supply of coffee and the conservation of nature and its natural resources for generations to come. We are proud of the partnerships we have built that allow us to implement innovative solutions for the prosperity of all.”
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 Coffee Group’s LIFT sustainability program or Seeds for Progress Foundation. Any premium will be disbursed to similar programs sponsored by Rabobank as the sustainability structuring agent along with ING Capital, International Finance Corporation and the Inter-American Investment Corporation as sustainability coordinators.
“This facility is a culmination of discussions we’ve had for more than a year on the appropriate structure and bank group for Mercon. Having commercial banks that understand the coffee industry and multilateral development banks that have a strong presence in Latin America provide a unique financing solution for Mercon,” Nader Pasdar, head of markets in North America for Rabobank, said. “We are pleased to have the banking partners in this facility that recognize and share our commitment to sustainability and excellence.”
