Stora Enso Issues New SEK Green Bond

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Stockholm (NordSIP) – Stora Enso, a Finnish manufacturer of pulp, paper and other forest products, issued its a SEK green bond on April 23rd. The dual-tranche SEK1.7 billion five-year green bond is the second time that Stora Enso comes to this market following the issuance of a three-tranche inaugural SEK6 billion green bond in February 2019.

The most significant tranche was a SEK1 billion floating-rate note paying STIBOR+2.2%. The remaining SEK700 million pay a 2.375% coupon and was priced at a 99.744 discount, equivalent to SEK-swap+220 basis points. The 75 bps increase in the spread over STIBOR paid by Stora since its inaugural launch highlights the effect of the COVID19 crisis in financial markets. The bookrunner for this transaction was Nordea and the bonds will be listed on the Luxembourg Stock Exchange.

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“We’re pleased with the transaction that further increases our liquidity buffer during these uncertain times of Covid-19 crises. Further, we are pleased with the issuance of our second green bond in SEK market. This issuance fits our sustainable finance strategy well. It’s a good continuation for the SEK 6 billion green bond issued in 2019,” says Group Treasurer Pasi Kyckling.

Among other projects, the proceeds from the new bond can finance the acquisition of forestland in Sweden. Funding will also be directed to an investment that produces cross-laminated timber (CLT) for high-performance green buildings at Gruvön Mill, in Sweden. The Maxau Mill in Germany will also receive a steam turbine that enhances renewable energy production and reduces our CO2 emissions.

“This second successful green bond is further evidence that our Sustainability Agenda underpins core business processes, such as the raising of new finance to strengthen our position to lead the shift to a sustainable bioeconomy,” says Noel Morrin, EVP Sustainability.

Stora Enso has been rated AA  by MSCI ESG Ratings since July 2016. In aggregate terms, it is considered a leader, in the top quartile of Paper and Forest Product companies. MSCI ESG Ratings highlights its leadership in good governance practices, and rates Stora Enso as average on biodiversity, carbon emissions, labour management, toxic emissions and waste and raw material sourcing. Only in what MSCI categorises as water stress is Stora Enso considered a laggard in its industry.

Image by Olya Adamovich from Pixabay

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In the current economic environment, even the strongest companies will face challenges from the impact of the COVID-19 pandemic. Perhaps now more than ever, understanding the factors that could have a material impact on a company’s sustainability will play a role in investment decision-making.

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