// Burberry is raising new funds to boost its sustainability drive
// Burberry has placed a strong focus on ethics and sustainability since it was embroiled in a 2018 scandal
Burberry has tapped debt markets for the first time in its history by launching a sustainable bond to help its liquidity.
However, the luxury retailer said that the money will be ring-fenced to be used to boost its eco drive.
Burberry has placed a strong focus on ethics and sustainability since it was embroiled in a scandal in 2018 that showed it was burning tens of millions of pounds worth of unsold stock.
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Burberry said it will diversify the firm’s sources of funding, “introducing long-term financing into the company’s capital structure”.
The retailer has applied to be rated by Moody’s and expects the bond to be rated Baa2, which represents a stable outlook.
However, Burberry maintained that it is not in need of cash but “has a conservative capital allocation policy and already holds substantial liquidity”.
After the Covid-19 lockdown, Burberry drew down its £300 million revolving credit facility (RCF) and issued £300 million of short-dated commercial paper under the Bank of England’s Covid Commercial Financing Facility (CCFF), with a maturity in March 2021.
The RCF drawings were repaid in full in the first quarter of its latest financial year.