Green Bond and Securitisation

In January 2022 Zenith raised its inaugural green senior secured fixed rate notes, due in 2027. In addition, the business entered into a new £65 million revolving credit facility (RCF) to replace its existing credit facility.

The senior secured notes (known as the green bond) are the UK vehicle leasing sector’s largest ever green bond. This green bond carries a commitment to spend at least an equivalent amount to the bond’s proceeds over a two-year period on eligible green projects or investments. This means that Zenith is committed to spending at least £475 million by January 2024 on BEVs or similar vehicles that have zero emissions at the tailpipe.

The new financing arrangements, via the green bond and the new RCF, provide a range of benefits for Zenith and our vehicle funding partners:

• Credit rating of B+/B1 (stable) by S&P and Moody’s respectively
• Term debt maturity extended to mid-2027 on attractive terms
• Fixed coupon: attractive in a rising interest rate environment
• Additional undrawn liquidity, via the undrawn £65 million RCF, and around £32 million cash on balance sheet from financing
• Security position: the new bond is structurally subordinate to any vehicle financing or other asset financing downstream in the Group; this clarifies an existing position, and makes creditor ranking and priority more transparent for all concerned
• Dozens of new funds and investors into Zenith; a strong signal of support for our business model, strategy, financial position and performance.