Global water tech firm Xylem closes $1 billion inaugural Green Bond

Leading global water technology company Xylem Inc. has  announced the successful closing of its inaugural green bond offering of $1 billion in senior unsecured notes.

The offering, which received strong support in the market, consisted of $500 million of 1.950% senior notes due in January 2028 and $500 million of 2.250% senior notes due in January 2031.

The proceeds will fund green projects that help improve water accessibility, water affordability, and water systems resilience, in alignment with Xylem’s Green Finance Framework.

“Solving the world’s toughest water challenges already puts sustainability at the heart of our business, and this bond offering brings sustainability to the center of our funding strategy,” said Mark Rajkowski, Xylem’s Chief Financial Officer.

“We’re very pleased by the market’s enthusiastic interest in the bond. It both expands liquidity at attractive rates and provides funding capacity for green projects that are important to our customers, employees, shareholders and communities.”

The bond is the second sustainability-driven financing completed by the company, which previously executed an $800 million revolving credit facility with a sustainability-linked pricing mechanism in March 2019.

Xylem said the successful green bond offering further enhances its robust liquidity position and builds on the strength of the US-headquartered firm’s sustainability track-record.

It also aligns with its ambitious 2025 sustainability goals, which include the commitment to save more than 16.5 billion cubic meters of water through the use of advanced technologies.

The eligible projects Xylem will invest in include:

• eco-efficient- and/or circular economy-adapted products
• production technologies and processes
• solutions that advance sustainable water and wastewater management, including communities’ resiliency against the impacts of climate change

Claudia Toussaint, Xylem’s General Counsel and Chief Sustainability Officer commented:

“Technology is playing an increasingly important role in solving water issues and stewarding society’s shared water resources.”

“Xylem, with its long history of innovation, is applying the powerful capabilities of digital technology, integrated management and data analytics to make water systems more eco-efficient and sustainable. When we create more positive sustainability outcomes, we generate economic value while also creating value for society.”

Xylem’s 2025 sustainability goals, which underscore Xylem’s commitment to sustainability, include:

• Save more than 16.5 billion cubic meters of water through the use of advanced technologies;
• Prevent over 7 billion cubic meters of polluted water from flooding communities or entering local waterways;
• Reduce the CO2 footprint associated with the water cycle by over 2.8 million metric tons
• Provide access to clean water and sanitation solutions for at least 20 million people living at the base of the global economic pyramid; and
• Use 100% renewable energy and 100% process water recycling at its major facilities.

In addition to its annual Sustainability Report, Xylem will also report annually on the allocation of the proceeds of the offering, and on the impact of the portfolio of eligible projects, until the proceeds of the Green Financing are fully allocated.

ING served as sole Green Structuring Advisor. For the offering of the notes, BNP Paribas Securities Corp., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, and ING Financial Markets LLC, served as joint active book-running managers. Wells Fargo Securities LLC served as passive book-runner.