New Kommuninvest Green Bond Coming Soon

    Stockholm (NordSIP) – Kommuninvest announced it will issue a new five-year Green bond, according to a press release from the Swedish municipal lender. Danske Bank, Nordea and SEB have been appointed lead managers for the transaction.

    The bond is expected to be launched and priced next week, subject to market conditions. No road show is planned for this deal. No target amount has been announced, but past green bonds have allotted between SEK 3 – 5 billion. Initial thoughts assume the security will price along its yield curve, currently at MS+8.5bps for the five-year maturity.

    The last time the Swedish municipal lender was in the green bond market was on 17 October 2018. On that occasion, it issued a five-year SEK 3 billion bond, priced “2.5 bps inside the issuer’s regular Swedish krona benchmark curve”. That transaction attracted demand from 29 institutional investors, including AP7, APG on behalf of its pension fund clients, Captor, Cliens, Czech National Bank, Danske Asset Management, Danske Bank A/S, Handelsbanken Asset Management, LF Bank, LF Jönköping, LF Västernorrland, MP Pension, Nordea Asset Management, SBAB Bank and Swedbank Robur.

    Kommuninvest is Sweden’s largest green bond issuer with a total of SEK 20.4 billion outstanding. Of this total, SEK 6 billion was completed in 2018. After this upcoming launch, the municipal lender will have launched six green bonds. Next week’s issuance will be the fourth such security denominated in SEK.

    Under its Green Bonds framework, Kommuninvest uses the proceeds from green bonds to finance Swedish municipal environmental projects. These projects target eight areas of intervention, including renewable energy, energy efficiency, green buildings, public transport, water management and waste management.

    By the end of 2018, Kommuninvest had disbursed SEK 26.1 billion from its Green Loan Portfolio, related to 232 investment projects in 109 municipalities and regions. During 2018, the portfolio grew by SEK 6.2 billion, investing in 86 new projects and increasing its coverage to another 28 municipalities. The Green Loan Ratio – Green Loans as a share of total lending – was 7.4%, at the end of 2018, up from 6.5% at the end of 2017.

    On 19 October 2017, the United Nations recognised Kommuninvest with its ‘Momentum for Change’ Climate Solutions Award, in connection with the COP23 climate conference in Bonn, Germany.

    Kommuninvest forecasts SEK 100 – 120 billion of funding transactions for 2019.

    Picture from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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