Green Bond Investors Embrace Arwidsro

    Stockholm (NordSIP) – Despite the damage wrecked by COVID-19 onto financial markets, sustainable fixed income products do not appear to have lost their appeal for investors looking to position themselves for a more resilient future.

    Arwidsro Fastighets AB issued SEK400 million in three-year senior unsecured floating rate green bonds that pay 3m STIBOR +500bps, on August 24th. According to the borrower, the transaction was “significantly oversubscribed by more than twice the issued volume”. The robust demand allowed the company to complete half of the SEK800 million it had earmarked in its green bond framework during this first foray into the green bond market. Arwidsro intends to apply for admission to trading of the new bonds on Nasdaq Stockholm’s corporate bond list for sustainable bonds.

    “We are very grateful for the reception in the Nordic bond market in connection with our first green bond loan. The bond loan is a milestone and contributes to our ability to continue to expand our property portfolio through investments within our green framework,” Peter Zonabend, CEO of Arwidsro, commented. “This gives us the opportunity to further increase the speed of our transition to a straight-through sustainable business,” added Maria Björkling, Sustainability Manager at Arwidsro.

    The issue proceeds from the bond issue will be used in accordance with the green framework, which means financing or refinancing of green properties and investments in energy efficiency improvements. According to comments made by Zonabend on the occasion of the company’s intention to enter the bond market, Arwidsro’s operations include long-term management of properties in defensive grocery-based trade and related services, community properties and housing. The CEO also explained that Arwidsro’s growth strategy for expanding its property portfolio relies on a presence in the bond market to complement traditional bank financing.

    SEB and Swedbank jointly advised Arwidsro on the establishment of the green bond framework. The two banks also acted as joint organizers and bookrunners in connection with this transaction. CICERO Shades of Green’s Second Opinion rated Arwidsro’s green bond framework as “Medium Green”, noting that the company “cannot report on energy use and GHG emissions, and refrain from formulating precise quantitative targets and climate strategies,” while praising its willingness to include life cycle analysis into their decision process. G&D has acted as legal advisor to Arwidsro.

    Image by HeatherPaque 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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