Caribbean Utilities Company, Ltd. Announces the Closing of US$80 Million Private Placement of Senior Unsecured Notes and Inaugural Offering of Green Notes

Caribbean Utilities release

Grand Cayman, Cayman Islands- Caribbean Utilities Company, Ltd. (“CUC” or “the Company”) announced the closing of a US$80 million of Senior Unsecured Notes (the “Notes”) consisting of US$40 million 6.17% Senior Unsecured Green Notes due May 15, 2039, US$10 million 6.37% Senior Unsecured Green Notes due May 15, 2049, and US$30 million 6.37% Senior Unsecured Notes due May 15, 2049.

The debt offering was privately placed with institutional investors with CIBC acting as sole placement agent and sole green structuring agent. Proceeds from the offering will be used to repay short-term indebtedness, and to finance ongoing additions and upgrades to CUC’s generation, transmission, and distribution systems.

This offering marks the Company’s inaugural release of notes under its Green Financing Framework (the “Framework”), established in April 2024, and is also the premier instance of green bonds being issued by a corporate entity in the Cayman Islands to date. The Company plans to dedicate $50 million of the net proceeds from the sale of these Notes towards the funding or refinancing of new and/or current qualifying green initiatives, in accordance with the standards outlined in the Framework.

The Framework was assessed by second-party opinion provider, Sustainable Fitch, a leading provider of second-party opinions. Sustainable Fitch assessed the Framework as “Excellent” on a scale of Not Aligned, Aligned, Good and Excellent. This endorsement underscores the Framework’s robustness and the Company’s dedication to transparency and accountability in its environmental initiatives. The Framework has been developed in conjunction with the Green Bond Principles issued by International Capital Markets Association and Green Loan Principles issued by the Loan Market Association, the Loans Syndications and Trading Association and the Asia Pacific Loan Market Association.

Proceeds from transactions under the Framework can be allocated to four categories: renewable energy, energy efficiency, climate change adaptation, and clean transportation. These categories are deemed to be in alignment with CUC’s sustainability strategy and the Cayman Islands’ National Energy Policy.

President and Chief Executive Officer, Mr. Richard Hew stated, “We are pleased to secure this long-term financing on favourable terms, a reflection of the continued sustainability and strong credit ratings of the Company and the jurisdiction. At CUC, we recognize the crucial role of environmental responsibility, transparency, and accountability in fostering sustainable development. Hence, we are delighted to meet energy demands and climate parameters through the establishment of CUC’s inaugural green financing framework to refinance and finance eligible projects that will enhance the sustainability of investment opportunities, prioritizing projects with positive environmental impacts. We aim to propel measurable environmental impacts by financing projects that contribute to carbon reduction, energy efficiency, climate adaptation, and clean transportation.”

Mark St. Hill, Chief Executive Officer, CIBC Caribbean commended the CUC team on the successful closing and stated: “Our CIBC team is honoured to have been able to support the CUC team in delivering on their sustainability objectives, and this aligns with our strategic focus and commitment to support the energy transition in the region.”

The Notes will not be registered under the United States Securities Act of 1933 (the “Securities Act”) as amended, nor will they be registered under any state securities laws. Unless so registered, the notes may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.