Junk Firms Are Posing as Green Warriors to Reduce Debt Costs (2)

Feb. 24, 2021, 10:33 AM

Junk-rated companies owned by private equity firms are tapping ESG narratives to cut borrowing costs. Debt investors worry about being played.

To lop a sliver off its interest rates, German packaging company Kloeckner Pentaplast GmbH, owned by SVPGlobal, promised to use more recycled material and add more women in senior roles. French hospital operator Elsan SAS, also private-equity owned, pledged to improve customer satisfaction and cut waste, while PAI Partners-owned Euro Ethnic Foods SA said it would increase the number of electric forklift trucks used in its stores.

The number of sub-investment-grade European firms whose interest rates...

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