New Dark Green Hybrid Bond for a Carbon-Free World


Stockholm (NordSIP) – At the end of November, Ørsted launched a new green hybrid bond  €600 million maturing in 3019. The bond pays a fixed coupon of 1.75% per year and its first reset date is in 2027. The hybrid security was issued under Ørsted’s Green Finance Framework, which was rated “Dark Green” by CICERO.

Ørsted develops, constructs and operates offshore and onshore wind farms, solar farms and energy storage facilities, bioenergy plants and provides energy products to its customers. The company is the global market leader in offshore wind with a 30% market share currently has more than 1,400 offshore wind turbines installed. As of September 2019, 83% of Ørsted’s generated power and heat was ”green” and hopes to be virtually completely green by 2025. The Danish state has a is 50.1% majority stake in the company, which is rated of Baa1/BBB+/BBB+ from Moody’s/S&P/Fitch.

- Promotion -

“From Ørsted’s side, we are very satisfied with the result achieved on our green hybrid bond issue. Focusing strictly on green financing is an integrated part of our financing strategy, which gives our Treasury and Sustainability departments an opportunity to work closely together. At the same time we believe green bonds bring a good deal of ‘tail wind’ from increasing investor interest and demand,” says Kasper Kiim Jensen, Head of Treasury at Ørsted.

Demand for the hybrid security was strong with over 230 investors offering bids worth €4 billion and pushing the reoffer yield to 1.875%. “Ørsted is a well-known issuer in the capital markets showing great results, which partly explains the big interest. But the demand also tells us that investor interest in green investments and ESG in general is increasing day by day,” says Jens Frederik Nielsen, Global Head of Corporate IG Origination at Danske Bank.

Sectorally, asset managers dominated demand purchasing 78% of the securities and leaving the rest to banks (11%), insurance and pension funds (7%), central banks (2%) and others (2%). Geographically, demand was quite spread out. Investors domiciled in the UK and Ireland purchased 23% of the hybrid green bonds and Germans another 22%. Investors in the Nordics and France took up another 14% and 13%, leaving the rest for invesrtors in Italy (8%), the Benelux (7%), Switzerland and Austria (6%), Southern Europe (4%) and other undisclosed locations (3%).

“Ørsted is an absolute frontrunner in developing sustainable solutions, and have managed to succeed in an impressive transformation from a business built on coal and oil to nearly solely green energy. We are extremely proud to take part in this transaction, and support Ørsted in their further growth journey,” Nielsen adds.

Danske Bank acted as the sole joint dealer and joint book-runner on this transaction.

“Danske Bank is fully committed to developing the market for sustainable finance, which will be a key area for our clients in the years to come. We are proud to build on our long-standing relation with Ørsted by taking part of this strategically important transaction,” adds Bo Wetterstein, Head of Corporate and Institutional Banking in Denmark.

Image by Norbert Pietsch from Pixabay


Partner message

In the midst of a global pandemic, Apple announced one of the corporate world’s most ambitious environmental blueprints – to reduce the climate impact of every Apple device to net zero by 2030. The plan involves cutting 75 per cent of the company’s existing carbon footprint, not only for its own business but also across the manufacturing supply chain and product life cycle.

Learn more

NordSIP Insights

Most read this week

NordSIP Insights – Sustainable Fixed Income 2020

Believe it or not, this is our third edition of the Sustainable Fixed Income Handbook. We all remember how 2020 started, the year everything was...