BYMA incorporates the first Sustainability-linked Bond

‍As part of the recent launching of BYMA's new Sustainability Linked Bonds (VS) Panel, the Stock Exchange announces the incorporation of the first VS Bond issued by Red Surcos S.A. for an amount of US$ 20,000,000. Red Surcos S.A. is an Argentine capital company dedicated to the development, production and commercialization of inputs for the agricultural sector, mainly phytosanitary products such as herbicides, insecticides and fungicides.

The company's distinctive factor lies in the development of phytosanitary products produced from nanotechnology, which allows obtaining commercial products with a lower concentration of active compounds to obtain the same results as with traditional phytosanitary products and thus, a substantial reduction of the environmental impact during their application. Red Surcos' ON is aligned with the ICMA (International Capital Market Association) Sustainability Bond Principles.

‍Sustainability-Linked Bonds

‍Any type of bond whose financial and/or structural characteristics may vary depending on whether or not the issuer achieves certain predefined Sustainability or ESG objectives. In this sense, issuers explicitly commit to future improvements in their sustainability performance within a predefined timeframe. 

In this regard, BYMA's President, Ernesto Allaria, expressed: "The incorporation of the VS Bond of Red Surcos S.A to our panel indicates that more and more companies in Argentina, from multiple sectors, are becoming aware of the importance of sustainability and taking concrete actions through these sustainable financing alternatives. From BYMA, we continue adding efforts to create developments that allow generating the necessary conditions for issuers and investors to collaborate with the positive impact on the environment and society".

Features of the bond to be incorporated to BYMA's VS Panel

‍Red Surcos established a KPI that refers to the growth in sales volume (in liters) of the Nano herbicide family (Elite line). According to the External Review report, the KPI is considered material from an environmental point of view since the formulation of Elite herbicides based on the application of nanotechnology reduces the coefficient of environmental impact versus traditional herbicides, and addresses 3 of the 12 principles of Green Chemistry:

- Design safer chemical substances due to their reduced content of active ingredients.
- Use safer solvents and auxiliaries that come from plant / biological sources.
- Use of renewable raw materials (Principle 7).

The particular bond issue has a Sustainability Performance Objective of 35% growth in the number of liters sold of nano herbicides (Elite line). The structure of the Bond has a Contingent Interest, which consists in the increase of the cut-off rate defined in the bidding of 1% (100 basis points), in case the objective is not achieved.

The compliance date of the Sustainability Performance Goal will be August 31, 2023. Within 90 calendar days after the Sustainability Performance Target Compliance Date, the Issuer shall publish the Compliance Notice which shall be accompanied by a report issued by the Auditor confirming compliance with the Sustainability Performance Target (SPT).

‍Features of BYMA's VS Bond Panel

‍BYMA's VS Bond Panel is comprised of marketable securities that carry a positive environmental and/or social impact, as is the case of Red Surcos S.A, demonstrates the growing global, regional and local interest in sustainable finance. This development is the first Sustainability Linked Bonds Panel (VS Bonds) in the Argentine market. The issuers of these instruments explicitly commit to future improvements in their sustainability performance within a previously defined time frame. This is an unprecedented development in the country, carried out between BYMA and the Buenos Aires Stock Exchange, which proposes a new form of financing that promotes sustainable finance at the local level. 

‍More information about BYMA's VS Bond Panelhere

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