What’s up with the Wesfarmers (ASX:WES) share price today?

The company has today outlined a new bond issuance. Here are the details

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The S&P/ASX 200 Index (ASX: XJO) is having another day in the green so far this Friday, building on yesterday’s gains. At the time of writing, the ASX 200 is up a 0.62% at 7,356 points. But let’s take a closer look at one of the ASX 200’s most beloved blue-chip shares, Wesfarmers Ltd (ASX: WES).

The Wesfarmers share price started the day off strong, initially rising as high as $54.79 a share soon after open. However, investor sentiment seems to have cooled somewhat since. Wesfarmers shares dropped into the red before climbing again, and are presently trading at $54.60 apiece, up 0.47% for the day so far.

So what’s happening for this company today?

The name’s Bond. Sustainability bond

We did get one piece of news out of the company this morning. Just before market open, Wesfarmers released an announcement outlining a new bond issuance. The company is aiming to raise 600 million Euros (or $938 million) from these new bonds.

But this is no ordinary money-raising exercise. Wesfarmers announced it will be issuing its first-ever Euro-denominated bond in the European capital markets. Interestingly, this bond will be a “sustainability-linked” one. Sustainability-linked bond?

Wesfarmers explained it in its announcement this morning:

The interest rates payable on both the Australian denominated and Euro denominated sustainability-linked bonds are linked to Wesfarmers’ progress against two sustainability performance targets. 

The performance targets relate to increasing the use of renewable electricity in the Group’s retail divisions and reducing the CO2e emissions intensity of ammonium nitrate production in the Wesfarmers Chemicals, Energy and Fertilisers division.

Wesfarmers said the proceeds raised from these Euro bonds will “be used for general corporate purposes”.

Unfortunately for Aussie bond investors though, these bonds won’t be available for Australian retail investors. Instead, they will be offered as a listed product on the Singapore Stock Exchange.

Wesfarmers share price snapshot

Wesfarmers shares seem to have had a run of bad luck lately. Since peaking at a new all-time high of $67.20 a share back in late August, the company is now down close to 20% from those highs.

The Wesfarmers share price is now up 5.7% in 2021 year to date. It is also up just over 13% over the past 12 months. That compares with 9.7% and 18% respectively for the ASX 200 index.

At the current Wesfarmers share price, this conglomerate has a market capitalisation of $61.51 billion. It also has a dividend yield of 3.27%.

Should you invest $1,000 in Wesfarmers right now?

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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