Air France-KLM raise $2.2bn from two ESG-linked revolvers

Air France-KLM, Air France and KLM signed two ESG KPI-Linked Revolving Credit Facilities (RCF) with a large pool of international financial institutions in February, for a total amount of €2.2bn.

For each facility, a set of ESG linked Key Performance Indicators are embedded in the financing cost. The indicators are in line with Air France-KLM and the two airlines’ commitment to sustainable development and a gradual decarbonization of activities. 

The two RCFs include a financing cost margin adjustment mechanism (upward or downward) conditional to the independent achievement of dedicated Indicators, which include the reduction of CO2 emissions and the increase in the use of Sustainable Aviation Fuel, among others.

This set of agreements is the second successful sustainability-linked transaction undertaken by Air France-KLM combined with Air France and KLM after its inaugural Sustainability-Linked Bond issued in January 2023.

Air France-KLM and Air France are the combined borrower for the €1.2bn Sustainability-Linked RCF. This new facility has an initial 2026 maturity, includes two one-year extension options and provides for a €100 million accordion increase option at the lenders’ discretion during one year following the signing date.

This RCF was coordinated by Crédit Agricole Corporate and Investment Bank (CACIB) and Natixis, jointly acting as global coordinators, ESG coordinators and documentation agents, and concluded with a syndicate of 15 international banks.

KLM signed a €1.0bn RCF including ESG Key Performance Indicators.

This new RCF has an initial 2027 maturity and includes two one-year extension options and provides for a €200 million accordion increase option at the lenders’ discretion.

The RCF was coordinated by ABN AMRO, ING and Rabobank, with Crédit Agricole Corporate and Investment Bank (CACIB) acting as coordinator for the ESG targets. It was concluded with a syndicate of 14 international banks.

This facility replaces both the remaining direct loan granted to KLM by the Dutch State and the credit facility guaranteed by the Dutch State, both of which were cancelled by KLM.