Iron-Ore Giant Fortescue Makes Foray Into Green-Bond Market

Its billionaire founder pivoting ore business into green power. Firm aims to reach net-zero greenhouse gas emissions by 2040

Iron-ore giant Fortescue Metals Group Ltd. sold $1.5 billion in bonds that include a portion earmarked to benefit the environment, the latest effort by its billionaire founder Andrew Forrest to pivot into the booming green market

The Australian miner, through its FMG Resources (August 2006) Pty Ltd. unit, tapped the U.S. high-yield market with a two-part bond deal on Wednesday, according to a person with knowledge of the matter

The 10-year tranche is a $800 million green bond, said the person, who asked not to be identified as the details are private

It’s the first such debt from the company and the biggest dollar-denominated green junk bond tranche since early December, according to data compiled by Bloomberg

Proceeds from Fortescue’s debut sale of green bonds will be used to finance or refinance new or existing eligible green projects -- which may include renewable energy, energy efficiency, storage, clean sea and coastal freight transport, according to Fortescue’s sustainability financing framework

The green-bond market is exploding as governments and companies across sectors rush to raise money to fund their sustainability goals amid pressure from investors and regulators

Sales of the debt reached a record $513 billion last year, according to data compiled by Bloomberg. Climate Bonds Initiative, a London-based organization that sets green-bond standards, estimates annual sales could reach fresh highs of between $900 billion and $1 trillion by the end of this year -- and as much as $5 trillion by 2025

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