Micron gets credit to improve its sustainability

Micron Technology Inc. is taking advantage of a program sponsored by a French bank to refinance credit facilities to improve the Boise-based company’s sustainability.

The company recently announced the successful closing of nearly $3.7 billion inaugural sustainability-linked credit facilities. The facilities, which create additional long-term value for Micron’s stakeholders, are intended to reinforce Micron’s commitment to sustainability and 2030 environmental goals, the company said in a statement.

The program is with Crédit Agricole Corporate and Investment Bank, the French-based corporate and investment banking arm of Credit Agricole Group, the 12th largest banking group worldwide in terms of tier 1 capital. The bank considers itself a pioneer in the area of climate finance.

“In essence, Micron has been able to turn its laudable sustainability efforts into a net positive for shareholder return by taking the Crédit Agricole loan,” said Jim Handy, a veteran Micron analyst and general director of Objective Analysis, based in Los Gatos, California, in an email message. “The loan’s lower interest rate is a reward for a path that the company had already embarked upon. Kudos to Credit Agricole for having put together such a program, and kudos to Micron’s finance team for having learned of it and applied for it.”

What do the credit facilities consist of?

These facilities consist of a five-year $2.5 billion sustainability-linked revolving credit facility, which matures in May 2026, and a nearly $1.2 billion sustainability-linked term loan A, which matures in October 2024.

“The credit facility agreements refinance Micron’s existing revolving credit and term loan A facilities with no impact to cash or debt balances, while reducing future interest expense,” Micron said in a statement. “Both the revolving credit facility and term loan A feature pricing adjustment mechanisms linking Micron’s financial pricing to meeting the environmental targets the company has set for greenhouse gas (GHG) emission intensity, waste diversion from landfills and Responsible Business Alliance (RBA) score metrics.”

This transaction reflects Micron’s leadership in sustainable financing and positions the company as a top-five corporate sustainability-linked credit facility issuer in the U.S. while reaffirming Crédit Agricole CIB’s role as a strategic investment bank and partner to global companies for sustainability.

“The sustainability-linked credit facilities reflect the depth of our commitment to advancing Micron’s environmental, social and governance goals,” said David Zinsner, senior vice president and chief financial officer at Micron, in a statement. “In tying our environmental metrics to our financial performance, we aim to achieve positive sustainable impact while taking another step in integrating sustainability into all aspects of our business.”

“We worked closely with Micron to identify challenging sustainability issues and set ambitious targets in line with their strong companywide commitment,” said Marc-Andre Poirier, chief executive officer of Crédit Agricole CIB Americas, in a statement.

With more than a decade in this space, the company said it considers itself a pioneer in the environmental, social and governance (ESG) finance market. The Bank was the first French bank to sign the Equator Principles in 2003. It has also been a pioneer in Green Bond markets with the arrangement of public transactions from 2012 for a wide array of issuers (supranational banks, corporates, local authorities, banks) and was one of the co-drafters of Green Bond Principles and the Social Bond Guidance.

Micron’s history of sustainability

Micron is not new to sustainability efforts. The company recently released its sixth annual sustainability report, which includes time-bound goals to reduce GHG emission intensity by 75% over 2018 measurements, as well as achieve 75% water conservation and 95% waste diversion globally in 2030, the company said in a statement. The company also targets sourcing 100% renewable energy across its U.S. manufacturing operations by the end of 2025.

In this year’s report, the company said it had established four new long-term environmental goals to address its targets for energy, emissions, water and waste, and that it intended to spend approximately $1 billion over the next five to seven years on actions to achieve these goals.