On Tuesday, 22 August, NIB launched a five-year SEK 2 billion NIB Environmental Bond transaction (NEB) to support the Bank’s lending to selected environmental projects. This is the sixth and largest environmental bond NIB has issued in Swedish crowns.
In accordance with the Bank’s environmental bond framework the use of proceeds from this transaction will be allocated to a separate portfolio for onward disbursement of loans to new environmental projects. NIB does not refinance existing projects with NEB proceeds.
A high-quality orderbook of more than SEK 2.35 billion, dominated by green investors, demonstrates the robustness and depth of the SEK green bond market. The oversubscription enabled the deal to price at +2 bps, the tightest spread to mid-swaps for a 5-year transaction in more than two years in the SEK market.
The transaction was driven by a majority of ESG (environment, social and corporate governance) focused investors. In terms of the geographical breakdown, the Swedish investor base took almost the entire issuance, while Pension & Insurance was the most active in terms of type of investor.
“AP3 is proud to participate in NIB’s new SEK-denominated Environmental Bond. AP3’s investment in NIB green bonds is a core holding in our green portfolio and we are happy to increase our exposure and channel more funds to green projects. The investment is in line with the fund’s overall strategy to triple its holdings of green bonds until the end of 2018. The fund’s engagement to promote the green bond market is one of several important strategies where AP3 tries to have an impact to address global climate challenges”, says Mårten Lindeborg, Chief Investment Officer at Sweden’s pension fund AP3.
“We are very pleased that NIB provides the Folksam Group with an opportunity to invest in green bonds, as we are very focused on these types of investments. Ever since May 2016, we have directed nearly SEK 12 billion into green bonds. By engaging in these bonds we hope to safeguard good, long-term returns to our customers”, says Anders Bewiz, Head of Fixed Income at Sweden’s Folksam Group.
“The green bond market is continuing to develop globally and the Swedish market is playing an important role in that development. NIB is pleased with this new NEB transaction and happy to see the strong support from the domestic investors”, says Lars Eibeholm, Vice-President, Head of Treasury at NIB.
See a joint press release on the bond transaction PDF here.
|Bond Summary Terms|
|Nordic Investment Bank|
|Rating:||Aaa / AAA (Moody’s / S&P)|
|Format:||NIB Environmental Bond|
|Issue amount:||SEK 2 billion|
|Maturity date:||29 August 2022|
|Settlement date:||29 August 2017 (t+5)|
|Coupon:||Fixed, 0.448%, annually, 30/360|
|Reoffer spread:||Mid swaps+ 2 bps|
|Listing||London Stock Exchange|
|Joint lead managers:||Danske Bank / Nordea|
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.
For further information, please contact
Mr Jens Hellerup, Senior Director, Head of Funding and Investor Relations, at +358 961 811 401,
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