Swedish Green Government Bond Scheduled for August

    Stockholm (NordSIP) – The Swedish National Debt Office (Riksgälden) has provided updated details on its upcoming green bond. Riksgälden expects to issue the fixed-income security in August for an estimated value of about SEK20 billion.

    The bond will be issued in Swedish kronor and under the Debt Office’s programme for Euro Medium Term Notes (EMTN). The maturity of the bond will be set and communicated closer to the issue date. The bond will be issued through syndication, which means that a group of banks will be commissioned to execute the sale.

    According to Riksgälden, the green bond’s proceeds will be linked to central government expenditures that go towards meeting Sweden’s environmental and climate objectives. The Swedish government’s green bond framework was reviewed by CICERO Shades of Green and was rated “dark green”.

    “The majority of funds in the first round of allocations are planned for clean transportation, with a focus on maintenance and operation of electrified railways,” Cicero noted. “Most direct fossil fuel projects are excluded, including diesel trains. Since 20% of the Swedish railway tracks are not electrified, there could however be investments that indirectly support diesel-driven railways.”

    “Sweden has a comprehensive and transparent regime for selecting and reporting on environmental targets with good use being made of independent oversight and advice,” Cicero added.

    “There is great interest in the Swedish sovereign green bond and now with the framework in place, we are looking forward to bringing the bond to market. The fact that the bond has the highest possible green rating is an affirmation that makes it even more attractive,” says Debt Office Director-General Hans Lindblad.

    The Debt Office’s estimates of a SEK20 billion issuance volume is a function of the green expenditures decided by the government, which total SEK30 billion. When setting the issuance volume, the Debt Office also takes into account its overall funding plan and the market conditions at the time of issuance.

    “We are now finalising the details in order to be ready to issue the green bond in August. With this new bond, we can offer an investment alternative with low risk and a distinctly green stamp of approval,” says Anna Sjulander, Acting Head of Debt Management at the Debt Office.

    Green sovereign markets have been busy. Last week, Hungary issued a 15-year €1.5 billion green bond, rated “medium green” by CICERO. The bond pays a 1.75% coupon and was priced at a 97.322 discount to yield 1.957%, 214.5 basis points over the equivalent German vanilla Bund and 190bps over mid-swaps. Demand was very strong and order books closed at over €7.5 billion.

    Image © Riksgälden

    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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