Mondelēz debuts US$2.4B Green Bond Offering as Kraft Heinz pays SEC US$62m for accounting irregularities

USA – American multinational snack and food company Mondelēz International, Inc., has debuted the group’s first green bond, whose proceeds will be used to support the company’s key sustainability initiatives.  

According to Mondelēz, the €2.0 billion (US$2.4 billion) bond will be the largest ever green bond in the Packaged Foods and Consumer Goods Industry.  

The green bond issued by Mondelez International Holdings Netherlands B.V., a wholly-owned subsidiary of Mondelēz International, Inc., consists of €650m of 0.250% notes due September 2029, €650m of 0.625% notes due September 2032, and €700m of 1.250% notes due September 2041.  

Mondelēz intends to allocate the net proceeds from the offering to eligible projects that further the company’s commitment to more sustainably sourced ingredients, reducing waste in packaging, and tackling climate change. 

The eligible project categories are designed to protect and regenerate the environment and are in alignment with the United Nations Sustainable Development Goals. 

“I am proud to announce that we successfully placed our first green bond offering – the largest issuance to date within our industry,” said Dirk Van de Put, Chairman and Chief Executive Officer.  

“We remain laser focused on building a more sustainable snacking company and this green bond issuance is an important testament to our commitment to advancing our ESG agenda.” 

The owner of Cadbury chocolate brands has committed to publish annual updates on the allocation of the proceeds until the proceeds have been fully allocated to projects meeting the eligibility criteria.  

Kraft Heinz pays for accounting irregularities 

Meanwhile, Kraft Heinz is paying the U.S. Securities and Exchange Commission (SEC) US$62 million in civil penalties for accounting offenses committed between 2015 and 2018. 

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SEC concluded that Kraft Heinz engaged in accounting misconduct that included recognizing unearned discounts from suppliers and maintaining false and misleading supplier contracts from the last quarter of 2015 to the end of 2018.  

The improprieties reduced Kraft Heinz’s cost of goods sold and resulted in the company reporting inflated adjusted EBITA, a key earning performance metric for investors, according to the SEC. 

As a result of the investigation, the company wrote down the value of its Kraft and Oscar Mayer brands by US$15.4 billion, resulting in a US$12.6 billion net loss. It also slashed its dividends by more than 36%. 

These investigations by SEC on Kraft Heinz’s procurement accounting and control policies were catastrophic to Kraft Heinz’s leadership at the time, which was summarily ousted. 

Even with their ouster, Eduardo Pelleissone, Kraft Heinz’s former chief operating officer, and Klaus Hofmann, its former chief procurement officer, were still held accountable by SEC and have also been charged. 

Pelleissone has, for instance, been handed a civil penalty of US$300,000 with interest of US$14,211.31.

Subject to court approval, Hofmann will be required to pay a civil penalty of US$100,000 and has also been barred from serving as an officer or director of a public company for five years. 

Kraft’s agreement to pay the civil penalty is a sign that it is ready to put its ugly past behind.  The company also has agreed to refrain from future violations of this kind.   

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