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    Strong Demand for Norwegian Salmon Green Bond

    Stockholm (NordSIP) – On Thursday, January 23rd, Mowi ASA issued an inaugural €200 million five-year floating-rate Green bond. Starting from initial price talk (IPT) of a floating-rate 175 to 185 basis points (bps) over the 3-month Euribor rate, over €1 billion in demand from more than 130 investors brought the final spread down to 160bps. Danske Bank acted as Joint Global Coordinator and Green Bond Advisor for this transaction.

    Over half of investors were domesticated in Sweden (29%), Germany (22%) and Finland (19%). The rest came from Norway (8%), Denmark (5%), Spain (4%), Switzerland (3%), Luxembourg (2%) and other miscellaneous locations (8%). Sectorally, asset managers were completely dominant, purchasing 86% of the bonds. Banks (7%), Pension & Insurance companies (4%)and private wealth managers (3%) took the rest.

    According to Mowi’s green bond framework, eligible projects include investments in sustainable feed production meeting strict requirements on freshwater, seawater and organic and sustainably sourced feed material. A new freshwater hatchery plant using technology that will save approximately 99% of freshwater and reduce production time in the sea will also be included. Proceeds from this transaction will target projects that support 100% Aquaculture Stewardship Council (ASC) certified fish farms by 2025. The funds will also go towards reducing absolute emissions by 35% in 2030 and 72% in 2050, throughout the value chain.

    Mowi ASA, a Norwegian company, is the worlds largest supplier of farmed Atlantic Salmon satisfying approximately one-fifth of the global demand. It has been rated AA by MSCI ESG Ratings, which qualifies it as an ESG leader, particularly in the categories of “corporate governance” and “product carbon footprint”. Most impressively, Mowi is not considered a “laggard” on any of the key issues considered by MSCI ESG Ratings for the food products industry. The company’s Green bond framework is rated Medium Green by CICERO.

    However, Mowi’s activities have not been without problems. In February 2019, the European Commission opened a price-fixing investigation into Salmar, Mowi and Grieg Seafood, the major Norwegian salmon-producing companies. Three months later, the company was reportedly investigated by Scottish regulators for possible misreporting of chemical use.

    Image by danny moore 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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