Global semiconductor equipment and services company KLA Corporation announced today the closing of an inaugural $1.5 billion sustainability-linked revolving credit facility, with costs on the debt tied to performance against its goals to increase the use of renewable energy and cut CO2 emissions.

Sustainability linked loans and securities are an emerging form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. During the five-year term of the new facility, KLA will receive pricing adjustments based on its performance against increasing the usage of renewable electricity within its operations and reducing Scope 1, and 2 CO2 emissions.

Last year, KLA announced a target to use 100% renewable electricity across its global operations by 2030, which would also help to set the company on a path to achieve a 46% reduction in combined Scope 1 and 2 emissions by 2030, against a 2019 baseline.

Bren Higgins, Executive Vice President and Chief Financial Officer of KLA, said:

“This increased credit facility will provide KLA with additional financial flexibility to pursue its growth initiatives or capital returns strategies. In addition, having a new sustainability-linked credit facility demonstrates KLA’s commitment to couple its financial obligations to its environmental goals to bring additional long-term value to stakeholders.”

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