Pfizer issues $1bn sustainability bond

Proceeds are earmarked for the manufacturing and distribution of vaccines 

August 27, 2021

Pfizer has increased its presence in the growing sustainable debt market by issuing a $1 billion sustainability bond which will support the delivery of the Covid-19 vaccine. 
 
The note, due in 2031, is set to yield 0.53 percentage points above Treasuries after initial price discussions in the 0.75 percentage point area, according to media reports. 
 
The New York-based pharmaceutical firm says proceeds from the sale are earmarked for research and development expenses and manufacturing and distribution of vaccines. 
 
Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley are leading the sale which will also boost environmental and social impact projects within vulnerable populations. 
 
Pfizer also sold a similar $1.25bn sustainability bond in March 2020 which will pay interest semi-annually of 2.625% and mature in 2030. 
 
Pfizer’s executive VP Sally Susman said enhancing “our environmental stewardship and favourably impacting on the health of society is a goal Pfizer feels passionately about”. 
 
PNC Bank also closed its inaugural social bond in August 2021 with an issuance of $700m in 1.15% senior notes due in 2026. 
 
The US financial giant said proceeds would be primarily used to finance or refinance projects that promote "positive social outcomes" and benefit low-and-middle-income communities. 
 
Momentum in the sustainable debt market - green, social and sustainability (GSS) bonds - looks set to continue, according to a report from the investor-focused not-for-profit Climate Bonds Initiative.  
 
It said the market reached a cumulative $1.7 trillion in 2020, with green remaining the dominant theme, but with social and sustainability achieving higher volumes than in all previous years combined. 
 
The report concludes it expects the coming year to deliver a “sustained resurgence in GSS markets” driven by factors such as increasing national net-zero commitments and potential for a new climate triple-axis between the US, China and the EU, and a shift towards transition-based investment.