Arcos Dorados Holdings Inc., the world’s largest operator of McDonald’s restaurants, is planning to sell bonds tied to its sustainability goals for the first time.

The senior unsecured notes will be linked to reducing greenhouse gas emissions by 36% from restaurants and offices and 31% in the supply chain by 2030, according to a statement on Monday. The bonds will be issued by the Arcos Dorados B.V. subsidiary, the Buenos Aires-based company said.

Moody’s Investors Service assigned a Ba2 rating for the seven- to 10-year notes. Proceeds will fund a cash tender offer for about $351 million of Arcos Dorados 6.625% notes due 2023 and its 5.875% bonds due 2027, as well as for general corporate purposes.

Arcos Dorados announced the debt buyback separately on Monday. The company didn’t say how much it plans to raise in the new debt offering.

Sustainability-linked bonds, or SLBs, are growing in popularity because they can be used by a wider pool of borrowers, including those without big environmental projects, allowing them to tap a growing ethical fund industry and get cheaper borrowing costs. Global sales rose to a record $110 billion in 2021, according to data compiled by Bloomberg. Barclays Plc expects SLB sales to reach $235 billion by the end of the year.

SLBs can be used for general corporate purposes, provided issuers pledge to meet certain social or environmental thresholds, such as cutting carbon emissions firm-wide.

Arcos Dorados, which describes itself as the largest independent McDonald’s franchisee, is focused on finding ways to reduce greenhouse gas emissions, including plans to replace its fleet of vehicles with hybrid or electric vehicles and creating more strict programs for its distributors, according to its sustainability-linked financing framework published this month.

The franchisee has a moderately negative ESG Credit Impact Score from Moody’s, reflecting the credit rater’s assessment that ESG attributes are considered to have a limited impact on the current grade, “with greater potential for future negative impact,” Moody’s said in a statement Monday.

--With assistance from Scott Squires.

This article was provided by Bloomberg News.