Bonava Launches Inaugural SEK Green Bond

    Stockholm (NordSIP) – Real estate companies are some of the leading corporates issuing green bonds in Swedish Krona. Issuers such as Vasakronan and SBAB have often made the headlines for their contributions to the green bond market. Bonava is just the latest such company to join this market, suggesting the trend has not been altered by COVID-19.

    On September 4th, Bonava – a Swedish residential developer of sustainable and affordable housing – issued an inaugural SEK1 billion four-year green bond, which was priced at 3m Stibor +350bps. Proceeds from Bonava’s first green bond will be used to finance the development of housing in Sweden and Denmark that is certified according to the Nordic Swan Ecolabel.

    “We are very pleased to have been able to attract investor interest from several large institutions that by investing in us show that they believe in Bonava as a strong and leading property developer in norther Europe with a sustainable focus,” says Ann-Sofi Danielsson, CFO of Bonava.

    The the Nordic Swan Ecolabel is a lifecycle analysis-based methodology, which considers the environment throughout the construction process, from raw materials to use of the completed buildings. The certification includes strict requirements on energy efficiency, resource and waste management, and sustainable sourcing and content of construction materials, and promotes green aspects such as charging stations for electric vehicles, green roofs and energy storage in the buildings.

    “More than half of a building’s lifecycle emissions are generated during the construction phase and through the extraction, manufacturing and transport of building materials, while the remaining share comes from the energy use of the building. Sustainable housing development that combines a high energy performance and measures to reduce the emissions embedded in building materials is therefore urgent in order to reach the 1.5 °C goal. These aspects form the basis of Bonava’s green platform, and it has been a pleasure working together to establish the green financing framework,” says Moa Duvhammar, Analyst in Debt Capital Markets in Danske Bank. Danske Bank was the sole green structuring advisor for Bonava’s green financing framework.

    Danske Bank and SEB acted as joint arrangers of the bond offering. “We are delighted to have acted as joint bookrunner and green structuring advisor in Bonava’s inaugural green bond. The transaction appealed to several large institutions that believe in Bonava as a strong credit. Moreover, the transaction gained additional interest, as Bonava succeeded in demonstrating their strong commitment to sustainability towards investors,” commented Tobias Lundgren, DCM Originator in Danske Bank and responsible for the transaction.

    Prior to Bonava, Arwidsro Fastighets AB issued SEK400 million in three-year senior unsecured floating rate green bonds that pay 3m STIBOR +500bps on August 24th.

    Image by Michelle Maria 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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