Big River will seek 'Green Bonds' financing

Osceola, Arkansas-based Big River Steel (BRS) says it has priced the value of tax-exempt Industrial Development Revenue Bonds it will issue at $265 million. The bonds will be designated as “Green Bonds,” according to the scrap-melting electric arc furnace (EAF) steelmaker, since the net proceeds will be used “for eligible green expenditures for waste recycling and waste reduction that Big River Steel believes contribute substantially to pollution prevention and control.”

BRS says its ability to issue Green Bonds is “consistent with Big River Steel’s industry-leading environmental sustainability position as the world’s only LEED- (Leadership in Energy and Environmental Design-)-certified steel producer.” It says the bonds it intends to issue will mature in 2049.

Green Bonds, according to the Zurich-based International Capital Market Association, “should provide an investment opportunity with transparent green credentials” using “Green Bond Principles [that] promote integrity in the Green Bond market through guidelines that recommend transparency, disclosure and reporting.”

BRS says it will use the bond proceeds to finance or refinance an expansion of its Flex Mill, which is expected to double the company’s capacity. The expansion project, which commenced in January 2019, is expected to be completed later in 2020, “on time and on budget,” according to the firm.

“The level of interest shown by the bond investor community in supporting Big River Steel is much appreciated,” says Ari Levy, chief financial officer of BRS. “Given the success we had in the pricing of these bonds and the overall transaction execution, Big River Steel is closely monitoring the near-term debt capital markets to evaluate additional debt financing opportunities.”

The Arkansas Development Finance Authority is acting as the conduit issuer of the bonds, the proceeds from which will be loaned to BRS. BofA Securities is serving as lead underwriter for the offering and Goldman Sachs & Co LLC, Wells Fargo Securities, Crews & Associates Inc. and Truist Securities are acting as co-managers, according to a BRS news release.