Coles (ASX:COL) share price slides amid $1.3 billion sustainability refinancing

The ASX 200 retailer announced a major sustainability-linked refinancing package.

| More on:
a man inspects a capsicum while holding an eco-friendly green string bag in a supermarket produce aisle.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Coles Group Ltd (ASX: COL) share price is slipping in afternoon trade, down 1.78% to $17.935 per share.

At the same time the S&P/ASX 200 Index (ASX: XJO) is edging higher, up 0.2%.

Below, we take a look at the ASX 200 retailer's refinancing announcement.

What refinancing package did Coles report?

In an ASX announcement today, which may not be directly impacting Coles' share price, the company said it has replaced existing debt facilities with a total of $1.3 billion, 4-year Sustainability Linked Loans (SLL) under its bilateral debt facilities.

Coles has previously stated it is working to become Australia's most sustainable supermarket. In line with that, it said the new $1.3 billion SLL "draws a direct line" between its sustainability performance and its cost of capital.

The SLL is intended to increase transparency and accountability around environmental, social and governance (ESG) matters.

Coles' focus is on reducing CO2 emissions, decreasing the amount of waste that goes to landfill, and increasing the representation of women in its leadership positions.

Commenting on the SLL refinancing, Coles' chief financial officer Leah Weckert said:

Coles believes that sustainable businesses are better businesses, and our Sustainability Linked Loans reflect our commitment to working with all our stakeholders to make positive changes.

The SLL incentive structure is linked to our progress against company-wide sustainability goals with delivery of those goals delivering improved cost of capital, and is therefore an effective tool for driving sustainability throughout our business.

Australia and New Zealand Banking Group Ltd (ASX: ANZ), BNP Paribas and Rabobank acted as sustainability coordinators for the transaction.

Coles share price snapshot

The Coles share price is down 1.38% year-to-date, compared to a gain of 12.5% posted by the ASX 200. Coles shares are still recovering from a 15% fall in the latter weeks of February, following the release of its half-year financial results that appeared to disappoint investors.

Over the past month, Coles' share price is up 1.6%.

Coles pays a 3.2% annual dividend yield, fully franked.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Retail Shares

A happy young couple celebrate a win by jumping high above their new sofa.
Retail Shares

Overinvested in Wesfarmers shares? Here are two alternative ASX retail stocks

These stocks could complement an investment in Wesfarmers.

Read more »

Happy shopper at a clothes shop.
Retail Shares

The share price of this All Ords stock has jumped higher again. Here's why

Here's why Myer's share price is outperforming.

Read more »

A smiling woman at a hardware shop selects paint colours from a wall display.
Retail Shares

Wesfarmers shares recently hit a 52-week high. Can they go higher?

This business continues to impress investors.

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
Retail Shares

Would Warren Buffett buy Lovisa shares right now?

Is this a sparkly opportunity?

Read more »

Happy shopper at a clothes shop.
Earnings Results

Why did Myer shares just rocket 9%?

Investors are piling into Myer shares on Friday. But why?

Read more »

a thoughtful shopper with shopping bags wearing sparkly gold dress and matching shoes reclines on a chair with hand to chin in thought.
Retail Shares

Can Lovisa's new high profile CEO take Lovisa shares to new heights?

Is Lovisa about to embark on a new era of growth?

Read more »

A woman sits on sofa pondering a question.
Retail Shares

After soaring 244% in 5 years, how much further upside does Macquarie tip for Nick Scali shares?

The broker's expectations remain steady.

Read more »

Girl with make up and jewellery posing.
Retail Shares

Buying the dip: $5,000 invested in Lovisa shares a month ago is now worth…

It's been an outstanding first month for new Lovisa shareholders.

Read more »