Yorkshire transport firm raises £475m green bond

Leeds-based Zenith raises the UK vehicle leasing sector’s largest green bond.

Zenith Automotive Holdings Limited (together with its subsidiaries, the “Zenith Group”) has announced that Zenith Finco Plc, its wholly-owned subsidiary, has closed its inaugural offering of £475m green senior secured fixed rate notes due 2027.

In addition, Zenith Group has entered into a new £65m revolving credit facility to replace its existing credit facility.

The proceeds from the transaction repaid in full the existing term facilities, and the remaining amounts will be used for general corporate purposes and to pay fees and expenses in connection with the refinancing.

Tim Buchan, Zenith group chief executive, said: “Our mission at Zenith has never been clearer – to eliminate tailpipe emissions from the UK vehicle parc. I am therefore delighted to raise this green bond.

“Sustainability is a key aspect of our strategy and we are always looking at how we can reduce our own impact on the environment. This green bond will enable Zenith to remain at the forefront of sourcing and financing electric vehicles to meet the record levels of demand from UK motorists for low-emission transport.”

Over the next two years, the Zenith Group intends to spend in excess of the equivalent of the gross proceeds from the Notes on financing or refinancing eligible green projects, including battery electric vehicles across its three divisions, in accordance with its Green Financing Framework, which has been assessed by Sustainalytics.

The transaction is indicative of Zenith’s broader strategic goals in driving the take up of electric vehicles and helping to decarbonise the UK vehicle parc. Zenith is one of the largest purchasers of electric vehicles in the UK.

EVs make up over 50 per cent of the order book in Zenith’s corporate division indicating strong demand in this area. ZenAuto, the business’ direct-to-consumer segment, is also experiencing strong consumer demand for EVs.

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