K2A Returns with Green Bond

    Stockholm (NordSIP) – Following the launch of the first green equity three months ago, Knaust & Andersson Fastigheter AB (K2A) – a Swedish a real estate company – announced it is looking to issue a senior unsecured green bond loan in the near future.

    Founded in 2013, K2A focuses on long-term management of self-produced rental buildings for all types of housing. K2A claims it has been able to produce buildings with lower climate impact compared to conventional house production by using environmentally friendly raw materials – mostly locally produced Swedish wood.

    The green bond would have a maturity of three-years, a Swedish Krona denomination and be worth between SEK300-400 million. Nordea Bank and Swedbank were commissioned to arrange meetings with bond investors as joint bookrunners starting on 18 August 2020. Bond proceeds will be used to finance and refinance green properties as well as investments in energy efficiency improvements.

    “K2A’s operations are characterized by a high rate of investment through sustainable value creation, where the bond market is expected to be an important complement to traditional bank financing in the future,” comments Johan Knaust, CEO of K2A. “K2A has always been at the forefront of sustainability. During the second quarter of 2020, we were the first company in the world to launch a green framework for equities. Now, we take the next step in our investment journey, aiming to transparently report the company’s climate impact by setting up a framework for issuing green bonds.”

    The green finance framework has been designed in line with the Green Bond Principles developed by ICMA (International Capital Market Association) and has been evaluated by CICERO Shades of Green. The framework has received a “Medium Green” assessment and related policy documents and reporting standards have received an “Excellent” assessment from CICERO Shades of Green.

    Most recently, Fabege, another Swedish real estate company issued SEK1 billion in three-year dual-tranche green bonds. Half of the debt was issued through a fixed-rate note that pays a 1.364% coupon and was priced at 130 basis points over mid-swaps. The remaining amount was issued through a floating rate note paying 130 bps over the 3-month STIBOR.

    Image by brightfreak from Pixabay

    Image courtesy of brightfreak via 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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