NIB issues inaugural EUR environmental benchmark

On 10 September 2015, NIB priced its inaugural seven-year EUR 500 million environmental bond.

The issue has a final maturity of 19 September 2022 and pays an annual coupon of 0.375%. The transaction was priced at 99.176% to give a spread of 23.3 basis points over DBR 1.50%, due September 2022.

The transaction met a strong response in European markets with investors in the Nordic countries accounting for 25% of the demand. Asset managers, pension funds and insurance companies subscribed for over half of the transaction, central banks and official institutions about 16%, and the remaining 33% was placed with bank treasuries. The book exceeded EUR 650 million and consisted of 36 orders.

This is the first EUR-denominated NIB Environmental Bond (NEB) and the second environmental benchmark in 2015, following the SEK five-year transaction completed in April.

“AP2 appreciates NIB’s work to finance environmentally sustainable projects. It is a high quality organisation with a good framework for choosing projects and monitoring their progress. Investing in NIB’s new EUR-denominated environmental bond is a natural step for us to diversify our portfolio of ‘green bonds’ with a high quality issuer”, says Ole Petter Langeland, Head of Fixed Income, Second AP Fund (Sweden).

“NIB returned to the ‘green bond’ market despite the underlying market volatility. The high quality and granular order book underscores NIB’s strong and growing following among Green Bond investors, as well as NIB’s best-in-class reputation in the ‘green bond’ market”, says Ulrik Ross, Global Head of Public Sector and Sustainable Financing at HSBC.

“The new benchmark offers investors a very rare opportunity to buy NIB in EUR, as the Bank’s previous EUR benchmark dates back to 2009. The deal met with very strong demand from high-quality ESG investors, highlighting NIB’s credit and its environmental bond framework, rewarding NIB for its extensive work with European ESG investors over the past year”, says Pierre Blandin, Global Head of SSA Origination at Crédit Agricole CIB.

“About 70% of the book has an environmental focus, which represents a strong commitment to NIB’s environmental profile. It is encouraging to see this much support from European investors, with nearly half of the investors buying NIB for the first time”, says Jens Hellerup, Senior Director, Head of Funding and Investor Relations at NIB.

See a joint press release on the bond transaction PDF here.

For more information about NIB Environmental Bonds click here.

Bond Summary Terms
Nordic Investment Bank
Rating:	Aaa/AAA (Moody’s/S&P)
Issue amount:	EUR 500 million
Issue date:	10 September 2015
Settlement date:	17 September 2015
Coupon:	0.375%, payable annually
Maturity date:	19 September 2022
Reoffer spread:	Mid-swap -16 bps
Benchmark:	DBR 1.5% due September 2022
Reoffer vs. Benchmark:	+23.3 bps
Reoffer price:	99.176%
Reoffer yield:	0.495% annual
Format:	Eurobond
Joint Lead Managers:	Bank of America Merrill Lynch, CA CIB and HSBC

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