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Berkshire Hills Bancorp Issues $100 Million Sustainability Bond

Company Release - 6/30/2022 

First U.S. Community Bank Holding Company to Issue a Bond Dedicated to Supporting Social & Environmental Projects

BOSTON, June 30, 2022 /PRNewswire/ -- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) ("Berkshire" or the "Company") announced today the completion of the public offering and sale of its inaugural Sustainability Bond, offering $100.0 million of its 5.50% fixed-to-floating rate subordinated notes due 2032 (the "Notes"). The Notes were sold at par, resulting in $98.3 million in net proceeds, after underwriting discount and estimated offering expenses. The Company intends to use an amount equal to the net proceeds to finance or refinance new or existing social and environmental projects consistent with its Sustainable Financing Framework.

Berkshire is the first public U.S. community bank holding company with under $150 billion in total assets to issue a Sustainability Bond.

"Berkshire has been at the forefront of meeting the financing needs of its communities for more than 175 years. This moment is no different as our Sustainability Bond offering reflects our commitment to supporting the communities we serve and providing the capital needed for targeted projects to help businesses prosper, individuals realize the dream of homeownership and support the transition to a low-carbon economy," stated Nitin Mhatre, Berkshire's CEO. "This is a significant step towards Berkshire achieving its goal of being a high-performing, leading socially responsible community bank while enabling the financial potential of its communities," he added.

"We are thrilled by the investor response to our sustainability bond issuance. It demonstrates investor confidence in Berkshire's vision, performance, credit discipline, environmental, social, and governance (ESG), and capital strategy. Furthermore, this issuance will help reduce our cost of capital while delivering a meaningful benefit to our communities," added Berkshire's Chief Financial Officer Subhadeep Basu.

Moody's Investors Service ("Moody's"), in a report dated June 21, 2022, assigned Berkshire and Berkshire Bank (the "Bank") first time ratings. Moody's assigned the Bank a long-term deposit rating of "A3". In addition, Moody's assigned the Company an investment grade long-term issuer rating of "Baa3". The rating outlooks are "Positive" for both the Company and the Bank.*

Berkshire's Sustainable Financing Framework will guide the selection and management of projects. Sustainalytics, a Morningstar Company, and the global leader in high-quality ESG research, ratings, and data, has independently verified that Berkshire's Sustainable Financing Framework "is credible and impactful and aligns with the International Capital Market Association's (ICMA) Sustainability Bond Guidelines 2021, Green Bond Principles 2021 and Social Bond Principles 2021"**. Projects financed will focus on eligible categories outlined in Berkshire's Sustainable Financing Framework including renewable electricity generation; green buildings; renewable energy technology, storage and manufacturing; energy efficiency in commercial, residential and public buildings; affordable housing; workforce housing; and financial inclusion and access activities. Additionally, Berkshire intends to publish a report annually until full allocation describing the amount of net proceeds allocated to each eligible project category, descriptions of specific projects financed, unallocated balances and, where feasible, qualitative and quantitative measures of the expected environmental or social impact.

"Our Sustainable Financing Framework addresses areas critical to the long-term success of our communities and is consistent with our broader ESG commitment. We view our sustainable financing activities as a catalyst to deliver on our BEST Community Comeback and to be an engine for positive change in our communities. As a result of our Sustainability Bond we'll support the clean-energy transition, help small businesses and nonprofit organizations within low-moderate income neighborhoods and improve equitable homeownership," noted Gary Levante, Berkshire's SVP of Corporate Responsibility.

Keefe, Bruyette & Woods, A Stifel Company, and PNC FIG Advisory, part of PNC Capital Markets LLC, acted as joint book-running managers for the offering. PNC Capital Markets LLC acted as the ESG Structuring Agent. Luse Gorman, PC acted as legal counsel to the Company and Hunton Andrews Kurth LLP acted as legal counsel to the underwriters.

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