DCP Midstream, LP announced the amendment and renewal of its $1.4 billion revolving credit facility, which now includes sustainability-linked pricing metrics.
The interest and fees paid on the credit facility are linked to two sustainability metrics, DCP’s progress toward reaching its target to reduce greenhouse gas (GHG) emissions, as published in its 2021 Sustainability Report, and outperforming midstream industry peers in safety performance.
“This is an innovative transaction and one of the first sustainability-linked financing arrangements within the midstream industry,” said Wouter van Kempen, chairman, president, and CEO. “We set aggressive goals, committing to a 30% reduction in our greenhouse gas emissions by 2030 and a net zero target by 2050, and this transaction demonstrates DCP’s accountability to meeting these goals and improving our sustainability performance.”
The $1.4 billion unsecured revolving credit facility has been extended five years and will mature in March 2027. Additionally, in anticipation of the cessation of the London Interbank Offered Rate (“LIBOR”), this is one of the energy industry’s first credit facilities linked to the Secured Overnight Financing Rate (“SOFR”).
“We are delighted to support the transition to new benchmark interest rates through this syndicated SOFR facility,” said Sean O’Brien, group vice president and chief financial officer. “We appreciate the strong support and commitment from our relationship banks. This facility extension, coupled with the successful execution of our strategy, continues to set up DCP as an industry leader and for long-term sustainability.”
Mizuho Bank, Ltd. and JPMorgan Chase Bank, N.A. acted as joint lead arrangers for the facility, and Mizuho acted as DCP’s Sustainability Structuring Agent.
