NIB SEK 1bn environmental bond priced

On 16 April 2015, NIB priced a new 5-year SEK 1 billion NIB Environmental Bond (NEB). This was NIB’s third and largest Swedish Krona denominated Environmental Bond to date.

Given the strategic nature of this transaction and rarity of Swedish Krona sustainable bond issuances, NIB announced the mandate on 14 April with the intention to gather investor feedback on the preferred transaction tenor. On 15 April, IPTs were released for a 5-year benchmark transaction at mid-swaps-13bps area. The order book opened the following morning and quickly reached SEK 850 million. The Environmental Bond was priced at a fixed annual coupon of 0.155% equivalent to 36.5 bps over the Swedish Government Bond SGB 4.25%.

The transaction was driven by those investors integrating environmental, social and governance (ESG) considerations within their investment process. The participation rate of ESG investors was particularly high at 95%. In terms of geographical breakdown, the Nordic investors dominated with 67% of the orders, followed by Germany with 19%, North America with 12% and France and Australia with 1% each.

“Nordic investors play an important role for the development of the green bond market, so we are happy that a broad variety participated in our bond. A good part of placement was to ESG investors outside the Nordic area. This underlines the importance of the SEK market and the appeal NIB’s environmental bonds have”, says Jens Hellerup, Head of Funding and Investor Relations at NIB.

The bond proceeds are to be used for financing selected loans to projects considered to enhance the environment in NIB’s member countries. NIB has established a framework that allows for funds raised through issuances of NIB Environmental Bonds to be directed to its environmental lending projects, which qualify as eligible under the framework if they satisfy strict internal environmental sustainability criteria and are aimed at (but not limited to) reducing emissions to air by promoting energy efficiency, renewable energy, public transport solutions and recycling; as well as reducing discharges to water by improving wastewater treatment.

Projects co-funded with the proceeds from the NIB Environmental Bond programme are presented here.

More details of the transaction can be found in the lead banks’ press release (PDF).

For more information, please contact:

Mr Jens Hellerup, Head of Funding and Investor Relations, at +358 9 6181 1401