O-I Glass Completes Full Allocation for Second Round of Green Bond Offerings
O-I Glass has completed the allocation of $690 million and €600 million in its second round of Green Bond offerings, aimed at advancing its climate-change strategy. The proceeds were spent on renewable energy, energy efficiency, sustainable water management, and environmentally friendly production technologies. Notable investments include the MAGMA technology and new energy-efficient furnaces in Colombia and France. These initiatives are expected to significantly reduce CO2 and NOX emissions. Sustainalytics positively reviewed the framework outlining these projects, affirming their environmental impact. The completion marks a major step in O-I's commitment to sustainability and innovation.
- Completed full allocation of $690 million and €600 million in Green Bond offerings.
- Invested in renewable energy, energy efficiency, and sustainable water management.
- Notable projects include MAGMA technology and new furnaces in Colombia and France.
- Significant reductions in CO2 and NOX emissions reported.
- Sustainalytics positively reviewed the projects' environmental impact.
- Investment in recycled glass resulted in substantial conservation efforts, including saving 5.7 million metric tons of CO2 and 4.7 million MwH of energy.
- Risks and uncertainties associated with the Green Financing Framework and climate-change strategy are subject to disclaimers and qualifiers.
- Completion of Green Bond allocations does not guarantee alignment with all stakeholder preferences or sustainability definitions.
Insights
From a financial perspective, the completion of $690 million and €600 million in Green Bond offerings represents a significant step for O-I Glass in terms of capital management and strategic positioning. Green Bonds are debt securities that fund environmentally friendly projects and they tend to attract environmentally conscious investors interested in sustainable investments. This diversification of funding sources can lower borrowing costs and enhance investor confidence.
Short-term, the allocation of proceeds towards these green initiatives can improve O-I’s liquidity and financial stability. Long-term, the investments in energy efficiency, renewable energy and sustainable practices can lead to substantial cost savings and a reduction in operational risks related to environmental regulations. This financial prudence, combined with transparency in allocation and third-party verification, supports the company’s commitment to sustainability—a factor increasingly valued by investors.
Additionally, with the company's reported use of proceeds—$1.34 billion allocated towards sustainability improvements—this move may also favorably impact the stock price by attracting ESG-focused funds and enhancing the overall market perception of O-I as a forward-thinking, environmentally responsible entity.
Still, investors should be cautious of potential risks associated with evolving definitions and expectations of sustainability, as mentioned in the disclaimer. Regulatory changes could impact the perceived value and compliance of these initiatives.
O-I Glass’s allocation of Green Bond proceeds to various sustainability projects underscores their proactive approach to environmental responsibility. The focus on renewable energy, energy efficiency, sustainable water and wastewater management and environmentally friendly production technologies speaks volumes about their commitment to reducing their environmental footprint. For example, the MAGMA technology and GOAT furnace innovations are particularly noteworthy. These technologies not only reduce CO2 and NOX emissions but also promote energy efficiency and higher usage of recycled glass, aligning with global trends towards a circular economy.
Sustainable practices like these can yield long-term benefits, such as greater resource efficiency, operational cost savings and compliance with increasingly stringent environmental regulations. For investors, this signifies that O-I is not only mitigating environmental risks but also positioning itself as a leader in sustainable manufacturing. This foresight could translate to a stronger market position and potentially higher returns on investment.
However, it’s important to note that while the company’s measures are commendable, the overall impact depends on the successful implementation and ongoing commitment to these green initiatives. The broad spectrum of projects and their varying stages of development could pose a challenge in maintaining consistent progress.
- O-I completes full allocation of
$690 Million due 2031, issued by Owens-Brockway Glass Container, Inc. - O-I completes full allocation of €600 Million due in 2028, issued by O-I European Group B.V.
- Allocations mark another significant step forward in company climate-change strategy
Perrysburg, Ohio, May 13, 2024 (GLOBE NEWSWIRE) -- – O-I Glass, Inc. (“O-I Glass”, “O-I” or the “Company”) announced today that the Company has completed full allocation of the proceeds from its second round of Green Bond offerings to advance the company’s climate-change strategy. In May of 2023, Owens-Brockway Glass Container Inc., and OI European Group B.V. launched private Green Bond offerings of
The Green Bond proceeds were spent on Eligible Green Projects as defined in O-I’s Green Financing Framework (the “Framework”), developed based on the Green Bond Principles and the Green Loan Principles.
The Company engaged Sustainalytics to provide a second-party opinion, which noted the Framework’s outlined Eligible Green Projects are “expected to deliver positive environmental impact” and are “credible from a transition perspective.”
The Green Bond proceed expenditures enriched O-I’s climate-change strategy through the following Eligible Green Projects: renewable energy reliance, energy efficiency, sustainable practices in water and wastewater management, environmentally friendly production technologies and processes, circular economy, and environmentally friendly adapted products.
Additional details of the Company’s allocation are provided in the following tables:
| Eligible Green Projects | Total Allocation (USD) up to January 2024 | |
| Sustainability in O-I Group Operations | Renewable Energy | 1,937,133 |
| Energy Efficiency | 3,534,676 | |
| Sustainable Water & Wastewater Management | 1,905,892 | |
| Environmentally Friendly Production Technologies and Processes | 164,272,175 | |
| Sustainable Products | Circular Economy | 1,151,953,109 |
| Environmentally Friendly Adapted Products | 15,657,015 | |
| Total Use of Proceeds | 1,339,260,000 | |
| Use of Proceeds Spends on Eligible Green Projects (USD) | |
| Financed | 448,287,316 |
| Refinanced | 890,972,684 |
| Total Use of Proceeds | 1,339,260,000 |
| Use of Proceeds Spends on Eligible Green Projects (USD) | |
| Operating Spends | 1,236,857,118 |
| Capital Expenditures | 102,402,882 |
| Total Use of Proceeds | 1,339,260,000 |
“The road to sustainability, for O-I, is paved by innovation” said Meena Dafesh, Vice President, Treasurer for O-I. “We are continuously working across our entire ecosystem of partners to advance the sustainability of our products and processes. Through the use of Green Bond proceeds, and other visionary approaches, O-I is making tangible progress toward our ambitious sustainability goals and helping our customers to advance in their aspirations as well.”
The commitment to cullet (recycled glass) investment underscores the company's strides toward a sustainable future by immediately reducing carbon emissions, lowering energy consumption, and preserving natural resources. With the amount of cullet designated for this initiative, the company has achieved significant conservation efforts including, approximately:
- 5.7. million metric tons of CO2;
- 4.7 million MwH of energy;
- 6.3 million tons of silica sand;
- 2.0 million tons of soda ash; and
- 1.8 million tons of limestone and dolomite
These sustainable savings coming from cullet utilization are further enhanced by additional eco-friendly investments made by the company that are designated to that initiative, which include:
- MAGMA technology, which is designed for flexible, modular glass production and can reduce the environmental footprint of glass production. Facilities built for MAGMA will feature a smaller melter and will be constructed using more sustainable methods and materials. MAGMA technology will enable advanced technologies, including light-weighting potential, on-off capability, and can include feed-forward and feed-back control loops to promote premium quality glass.
- Advances in the O-I Zipaquirá Colombian plant are set to improve energy efficiency, lowering CO2 emissions by up to
15% per ton produced on the new furnace. In addition to the decarbonization impacts, the new technologies also reduce NOX emissions by up to 50 % compared to a traditional air fuel-fired furnace and allow for higher usage of recycled glass. - A Gas Oxy Advanced Technology (GOAT) furnace in O-I's Gironcourt, France plant, which uses oxygen to reduce CO2 emissions by up to
20% and NOX emissions by up to60% . - The R&D team at O-I developed the "Estampe” bottle in France to leverage greater recycled content, up to
80% or more on average – well above the current European average of50% recycled content. The innovative Estampe bottle strengthens the overall sustainability with a reduced carbon footprint – about25% less carbon emissions compared to conventional 500g wine bottles.
Management’s assertions on the allocation of an amount equal to net proceeds to qualifying Eligible Green Projects as well as the examination reports of our independent accountants are available on the O-I website, along with information on O-I’s overall sustainability agenda.
In November 2019, O-I became the first U.S. high yield industrial green bond issuer with the company’s inaugural green bond issuance, and O-I remains committed to supporting our climate-change strategy through sustainable financings. To learn more about O-I’s Green Financing Framework, offerings, and allocation of net proceeds to qualifying eligible green projects, visit: http://o-i.com/sustainability
IMPORTANT NOTES ABOUT THIS INFORMATION
Perceptions of the sustainability and “green” nature of activities and projects are subject to varying definitions, expectations, and regulations, which continue to evolve. Certain of these decisions involve notable discretion and, as such, we cannot guarantee that the activities discussed above align to any particular stakeholder’s preferences or any specific taxonomy regarding sustainable or green activities. Moreover, our Green Financing Framework, the allocation of funds to Eligible Green Projects referenced in this announcement, and related aspects of our climate-change strategy are subject to certain important disclaimers, qualifiers, and risks, including those included in our filings with the Securities and Exchange Commission, that should be reviewed in concert with any assessment of the characterization of our activities hereunder.
ABOUT O-I GLASS
At O-I Glass, Inc. (NYSE: OI), we love glass, and we are proud to be one of the leading producers of glass bottles and jars around the globe. Glass is not only beautiful, it is also pure, healthy, and completely recyclable, making it the most sustainable rigid packaging material. Headquartered in Perrysburg, Ohio (USA), O-I is the preferred partner for many of the world’s leading food and beverage brands. We innovate in line with customers’ needs to create iconic packaging that builds brands around the world. Led by our diverse team of approximately 23,000 people across 68 plants in 19 countries, O-I achieved revenues of
FAQ
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