FOR IMMEDIATE RELEASE
Global Manufacturer Nitrex Ltd. Closes $375 Million Sustainability-Linked Loan Tied to 42 % Scope-1 Emissions Cut by 2028
Five-year revolving-credit facility will reward the nitrogen-products maker with lower spreads if it beats verified CO₂ benchmarks aligned to 1.5 °C science-based pathway
Montreal, Canada – November 21, 2025
Nitrex Ltd., the world’s third-largest supplier of specialty nitriding systems and heat-treat furnaces, today announced the closing of a CAD 375 million (USD 275 million) sustainability-linked revolving credit facility in which the interest margin moves in direct proportion to the company’s success in cutting greenhouse-gas emissions. The five-year agreement, syndicated by Royal Bank of Canada and BNP Paribas, is the first loan in the North-American industrial-equipment sector to tie all pricing tiers to verified CO₂-eq intensity targets rather than broader ESG scores.
The facility replaces an existing CAD 300 million revolver and lowers Nitrex’s weighted borrowing cost by 35 basis points at signing. From 2026 onward the spread can ratchet down another 20 bps—or up 25 bps—each year depending on whether the firm meets, beats or misses pre-set Scope-1 and Scope-2 emissions thresholds validated by SBTi. Independent auditor KPMG will verify annual performance.
> “This loan turns decarbonization into a cash-flow positive exercise,” said Sylvain Dufresne, Chief Executive Officer of Nitrex. “Every kilogram of CO₂ we eliminate converts into hard-interest savings that can be re-invested in next-generation low-nitrogen-oxide furnaces. Our engineers already reduced combustion intensity 19 % since 2022; the new capital structure accelerates that trajectory and signals to customers that our equipment future-proofs their own net-zero plans.”
Market data show borrowers globally raised USD 215 billion through sustainability-linked loans in the first nine months of 2025, a 28 % increase over the same period in 2024, according to BloombergNEF. Roughly 68 % of those facilities reference greenhouse-gas metrics, but fewer than one in four impose absolute-emission caps rather than intensity ratios, a [Harvard Business School study](https://www.hbs.edu/ris/Publication%20Files/23-027_4b09d278-4051-468e-a5d9-eb0e7c50c25d.pdf) published this year found. The same research concluded that lenders overwhelmingly extend SLLs to companies that already present below-median environmental risk, suggesting the instrument is “borrower-friendly” and unlikely to trigger material penalties for under-performance .
Nitrex’s lenders structured the agreement to reverse that pattern. Missing the 2028 target of 42 % absolute reduction versus a 2021 baseline will raise pricing immediately and require the company to purchase high-quality carbon-removal credits equal to the shortfall. Conversely, beating the target unlocks an additional 15 bps rebate earmarked for capital projects that further decarbonize customer plants.
“We wanted a mechanism where failure actually hurts and over-delivery is rewarded with cheaper capital,” noted Aisha Rahman, Global Head of Sustainable Finance at BNP Paribas. “Nitrex’s order book is directly exposed to automotive and aerospace OEMs racing to meet 2030 net-zero pledges, so the financial materiality of the KPI is clear.”
The company’s 2024 sustainability report, released alongside the loan documentation, shows Scope-1 emissions of 312,000 tCO₂-eq and Scope-2 market-based emissions of 96,000 tCO₂-eq across eleven plants in Canada, Germany, India and Mexico. Capital earmarked under the facility will fund the retrofit of three natural-gas furnaces to hybrid hydrogen-ready burners and the installation of 28 MW of on-site solar in Querétaro, Mexico, and Kitchener, Ontario. Together these projects are projected to eliminate 71,000 tCO₂-eq annually—equivalent to taking 15,400 passenger cars off the road—while cutting the company’s energy bill CAD 8.7 million per year at current gas and power prices.
Investor reaction was immediate. Nitrex’s 2029 senior unsecured notes tightened 11 bps in secondary trading, and two ESG-indexed funds increased their positions, according to data compiled by Refinitiv. Sustainalytics lowered the firm’s risk rating from “Medium” to “Low” within the capital-goods peer group, citing improved disclosure and the inclusion of absolute-emission covenants.
About Nitrex Ltd.
Nitrex is a privately held manufacturer of controlled-nitriding systems, heat-treat furnaces and related metallurgical services serving automotive, aerospace and energy customers in 42 countries. The company operates 11 production and R&D facilities, employs 2,100 people and reported CAD 1.1 billion in revenue for fiscal 2024. Nitrex has committed to net-zero emissions across its own operations by 2035 and to halving the embodied carbon of its equipment portfolio by 2040, targets approved by the Science Based Targets initiative in March 2025.
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