March 19, 2018 / 6:49 PM / 4 months ago

UPDATE 1-Danone's debut social bond attracts healthy appetite

* Bond issue more than two times subscribed - CFO

* In line with Danone dual financial and social agenda

* Danone seeking B-Corp certification (Adds CFO comments and details from call)

By Dominique Vidalon

PARIS, March 19 (Reuters) - French food group Danone said on Monday it had successfully launched its inaugural 300 million euro ($370 million) seven-year social bond, reflecting growing appetite among investors for ethical and responsible investing.

Proceeds will be used to fund projects backing notably responsible farming, local projects dedicated to empowering communities, social entrepreneurs or healthy food entrepreneurship, and R&D, it said in a statement.

The bond issue consists of a 300 million euro denominated senior note with a seven-year maturity and offering a 1.00 percent coupon due March 2025.

“The bond issue was subscribed more than two times. It enabled us to reduce the spread we started with in the morning and we ended with a premium of 6 basis points, which is a great outcome,” CFO Cecile Cabanis told a conference call.

“We have been seeing investors focused on ESG (Environmental, Social and Governance) that we did not have in our previous bonds and to that extend it was also a great outcome,” she added.

Danone, under the lead of CEO Emmanuel Faber, has been pushing on with a dual financial and social agenda, which - like that of many blue-chip companies - aims to not only boost shareholder value and profit but also meet other targets on the environment and social policies.

Danone has vowed to be certified as a for-profit corporation that commits to positive social and environmental goals (B-Corp)

In February, the company amended its 2 billion euro syndicated credit facility to introduce global environmental and social criteria directly impacting the margin payable to its banks over the entire duration of the facility.

As more consumers, notably the “Millennial” generation, opt for healthier diets and a more socially responsible way of life Danone, along with rivals such as Nestle, have been seeking to adapt. ($1 = 0.8105 euros) (Reporting by Dominique Vidalon Editing by Ingrid Melander and David Evans)

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