Stockholm Exergi Launches SEK2 Billion Triple Tranche Green Bond

    Stockholm (NordSIP) – As the summer lull comes to an inevitable end, we have witnessed more and more evidence that sustainable markets, particularly green bonds, continue to enjoy investor support, despite the COVID-19 pandemic.

    Following recent green bond issuances by the government of Sweden, the European Investment Bank (EIB), Bonava and Arwidsro, Stockholm Exergi came to the market on Friday, September 10th, with a SEK2 billion triple tranche green bond.

    Stockholm Exergi is a Swedish district heat, power and cooling producer and supplier. The company is owned by the City of Stockholm and Fortum and operates in the greater Stockholm area, with annual heat deliveries of around 8TWh – over 17% of total Swedish district heat demand. This electricity is 99% produced with renewable or recovered fuel sources. The company targets to be climate positive in 2025.

    The total amount was divided into three parts, including a four-year SEK400 million floating-rate note (FRN) that pays 50 basis points (bps)over the three-month STIBOR. Another SEK1 billion seven-year fixed-rate note that was priced at MS+90bps to yield 1.085%. The remaining SEK600 million were issued in a seven-year FRN that pays 90bps over the three-month STIBOR.

    Demand from 35 participating investors swelled order books to SEK6.7 billion and allowed the securities priced below their initial price guidance. Geographically, Swedish investors represented the dominant source of cash for Stockholm Exergi, with Swedes purchasing over 80% of the green bonds. Sectorally, asset and fund managers purchased over 55% of the tickets, followed by pensions and insurance funds.

    Stockholm Exergi’s green bond framework is aligned with the latest version of the Green Bond Principles and has achieved a Dark Green Shading from CICERO Shades of Green. This transaction is the second transaction under this green bond framework. Furthermore, the company has a BBB+ rating by S&P with a stable outlook.

    Danske Bank, SEB, Swedbank were joint bookrunners on this transaction.

    Photo by Robin Hayes courtesy of Stockholm Exergi

    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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