Sustainability-Linked Bond
To demonstrate FEMSA’s sustainability commitment, in April 2021 we announced the placement of Euro-denominated sustainability linked notes in the international capital markets. FEMSA successfully issued EUR €700 million in senior notes due in 2028 bearing interest at an annual rate of 70 basis points over the relevant benchmark for a yield of 0.551%, and EUR €500 million in senior notes due in 2033 bearing interest at an annual rate of 88 basis points over the relevant benchmark for a yield of 1.068% (the “Notes”). This issuance represents the largest ever sustainability-linked bond by a Latin American issuer, and it was backed by 196 international institutional investors and was oversubscribed 1.9 times.

In connection with the Notes, FEMSA developed and published a Sustainability-Linked Bond Framework, which was prepared in accordance with the Sustainability-Linked Bond Principles 2020, as administered by the International Capital Market Association. The Framework includes certain Sustainability Performance Targets (SPTs) of the Company, which are aligned with the 2030 priorities of our Sustainability Strategy, particularly the transition to a circular economy and the mitigation of climate change. In accordance with industry best practices, we obtained a Second-Party Opinion from Sustainalytics on the Framework, who noted the strength of the ambition level of FEMSA’s SPTs. Per the terms of the Notes, the satisfaction of the SPTs will also be verified by an accredited external party, and if such targets are not satisfied by certain dates, there will be an interest rate step up of 25 basis points.

Pursuant to the Sustainability-Linked Bond Framework, FEMSA has committed to annually disclose a Sustainability-Linked Securities update. For more information on our progress against the Framework’s key performance indicators and SPTs, please see our 2021 Sustainability Report, which accompanies this 2021 Annual Report.