Air France-KLM Secures €2.2 Billion in Revolving Credit Facilities Linked to ESG KPIs

Air France-KLM and its subsidiaries Air France and KLM have fulfilled their expressed intention and signed two Revolving Credit Facilities (RCF) linked to ESG KPIs (Environmental, Social, and Governance Key Performance Indicators).
 

These facilities, which amount to €2.2 billion, involve a large group of international financial institutions.

The financing cost for each facility is determined by a set of ESG Key Performance Indicators, reflecting the Group's and the airline's dedication to sustainable development and the gradual decarbonization of their activities.

Both facilities include a financing cost margin adjustment mechanism, which is conditional upon the independent achievement of the set indicators. These indicators include the reduction of unit CO2 emissions and the increase in the share of Sustainable Aviation Fuel.

These agreements represent Air France-KLM's second successful sustainability-linked transaction, following its inaugural Sustainability-Linked Bond issued in January 2023.

Agreement between Air France-KLM and Air France

Air France-KLM and Air France have jointly signed a €1.2 billion Sustainability-Linked Revolving Credit Facility (RCF) with an initial maturity of 2026 and the option to extend for two more years.

The lenders have the option to increase the facility by €100 million within one year of the signing date.

The agreement was coordinated by Crédit Agricole Corporate and Investment Bank (CACIB) and Natixis, acting as Global Coordinators, ESG Coordinators, and Documentation Agents.

The RCF is linked to sustainability performance indicators, reflecting the airline's commitment to sustainable development and decarbonization. A syndicate of 15 international banks participated in the agreement.

KLM Deal

KLM has signed a new €1.0bn RCF that includes ESG Key Performance Indicators.

The syndicate of 14 international banks coordinated by ABN AMRO, ING, and Rabobank, with CACIB serving as the ESG targets coordinator, has concluded a new RCF with an initial maturity of 2027, two one-year extension options, and a €200 million accordion increase option at the lenders' discretion.

KLM has canceled both the remaining direct loan and the credit facility guaranteed by the Dutch State, and this new facility replaces them. Consequently, the conditions associated with the aid are no longer relevant.