Stockholm (NordSIP) – On April 24th – Earth Day – the Nordic Investment Bank (NIB) announced it had issued €500 million in seven-year zero-coupon green bonds. The bond was issued under the ‘NIB Environment Bonds’ programme and was the first such transaction of 2020. Proceeds from this transaction will be channelled to projects that “enhance the environment.”
The green bond was priced at a 100.802 to yield -0.114% or 46.9 basis points over the underlying German Bund and is listed on the Nasdaq Helsinki exchange. Demand was strong with over 100 investors biding €2.9 billion, the most significant order book ever achieved by NIB for an Environmental Bond benchmark.
“The size, number of investors and quality of the order book, despite a 4bp tightening from guidance, is a tribute to NIB’s pioneering status in the Green Bond Market, and highlights the value that investors place in the largest Nordic green issuer’s Environmental Bond framework,” said Kamal Grossard-Amin, Head of SSA DCM, at Nordea.
“The demand for NIB’s new environmental bond benchmark was again strong with more than 100 investors for a record high of nearly €3 billion in orders in the book,” said Jens Hellerup, Senior Director, Head of Funding and Investor Relations at NIB. “We highly appreciate the strong investor support and see this as recognition of the high level of transparency, careful selection of eligible green projects and best in class impact reporting for NIB Environmental Bonds.”
Geographically, the Nordic investors purchased 20% of the securities, leaving another 12 % to investors in the Benelux, 42% to the rest of Europe and the remaining 26% to investors domiciled in Asia. Asset managers and pension funds were the most significant investor component with 36%, followed by central banks and official institutions with 35% and banks with 28%.
“NIB Environmental Bonds combined the strong credit strengths of NIB and the certainty that the funding is used to support sustainable environmentally-friendly projects in the Nordic and Baltic regions,” says Lars Dreier Kristensen, Senior Portfolio Manager at ATP. “NIB is one of the early pioneers of the Green Bond market and provides extremely high standards for its green use of proceeds and reporting. We were happy to be able to participate in this new NEB offering.”