More Attractive Green Yields Coming Up

Stockholm (NordSIP) – This week for our Green Bond Review, we talked to Nicklas Segerdahl, Fixed Income Portfolio Manager at Spiltan Fonder. He recently invested in the new issue of Swedish real estate company Klövern. He explains the whys, the hows and the buts of the transaction, and shares his views of the green bond market in general.

At Spiltan Fonder, Klövern isn’t the first green bond investment. “We have previously invested just over 1 billion in green bonds,” Segerdahl comments, “and as we were already familiar with Klövern in particular, we saw our chance to continue in taking part in green bonds trend.”

For Segerdahl, one of the interesting changes in the green bond market, is that issues are coming at more attractive yields. “Earlier issuers have been larger corporations and municipalities with strong credit ratings,” he says, “as the green bond market kicked in by A-rated companies (In Sweden – Vasakronan who initiated) which obviously have resulted in lower credit spreads and therefore this one in particularly was more interesting for us – in sense of greater yield. With that said – we look forward seeing more of this in the coming future.”

Leading the process lowered hurdles for Segerdahl and his team. “We were involved early in the process to make sure we could be an anchor in this green bond which allowed us to invest 15 of % the total transaction (SEK135 million).”

In general, Segerdahl notices a growing demand for this kind of bonds. “This will hopefully results in a win-win situation – both within the companies CSR policies as well as investors and more importantly the investors in the fund,” he adds.

“We welcome more green bonds and hopefully Klövern’s latest move can encourage other companies to follow the same path. For example next week we will attend the market bell ceremony on Nasdaq Stockholm together with Kungsleden in connection with their latest Green bond beeing listed.”

 

Picture © Spiltan