Zenith, Leeds car lease firm, in £475m green bond deal

Leeds-based car leasing and fleet management firm Zenith Automotive Holdings announced that its subsidiary Zenith Finco plc has closed its inaugural offering of £475 million green senior secured fixed rate notes due 2027.

Zenith said the deal represents the the UK vehicle leasing sector’s largest green bond.

In addition, Zenith Group said it agreed a new £65 million revolving credit facility to replace its existing facility.

Zenith Automotive Holdings is owned 73% by BEV Nominees Limited, a company of alternative asset fund manager Bridgepoint, and 27% by management.

Zenith said that over the next two years it intends to spend in excess of the equivalent of the gross proceeds from the bond on financing or refinancing eligible green projects, including battery electric vehicles across its three divisions.

Zenith is one of the largest purchasers of electric vehicles (EVs) in the UK.

Currently, EVs make up over 50% of the order book in Zenith’s corporate division.

S&P Global Market Intelligence reported that Zenith Automotive Holdings priced its £475 million offering of 5.5-year secured green notes at 6.5%.

It said HSBC and Barclays were joint global coordinators and physical bookrunners, while Goldman Sachs and NatWest Markets were joint bookrunners.

S&P Global Ratings and Moody’s assigned corporate and secured debt ratings of B+ and B1, respectively.

Zenith Group CEO Tim Buchan said: “Our mission at Zenith has never been clearer – to eliminate tailpipe emissions from the UK vehicle parc.

“I am therefore delighted to raise this green bond.

“Sustainability is a key aspect of our strategy and we are always looking at how we can reduce our own impact on the environment.

“This green bond will enable Zenith to remain at the forefront of sourcing and financing electric vehicles to meet the record levels of demand from UK motorists for low-emission transport.”