OR and Reginn Issue First Non-Indexed ISK Green Bonds

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    Stockholm (NordSIP) – In the aftermath of the 2008 financial crisis, Icelandic annual inflation peaked at 18.6% in January 2009. As the country progresses on its path to post-financial crisis recovery, one of the signs of the health of its financial system is the ability of borrowers to be able to issue non inflation-indexed bonds.

    On October 15th, Reykjavik Energy (Orkuveita Reykjavikur; OR) issued a new ISK3 billion green bond, the first non-indexed, fixed rate, green bond issued in Iceland. The bond pays a 2.8% coupon and matures on October 23rd, 2023. A week after, Reginn, an Icelandic real estate company, issued a ISK2 billion three-year green bond. The bond pays a 3.2% fixed rate coupon and was priced at par. Buyers in both transactions were predominantly Icelandic institutional investors. Fossar Markets acted as the dealer on both transactions. The Green Bond series will be listed on the Nasdaq Iceland Sustainable Bond market.

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    Funds from OR’s green bonds are used according to the company’s green bond framework, which targets eight types of investments mapped onto the UN Sustainable Development Goals (SDGs), including Clean Water and Sanitation (SDG 6), Affordable and Clean Energy (SDG 7), Industry, Innovation and Infrastructure (SDG 9), Sustainable Cities and Communities (SDG 11), Responsible Consumption (SDG 12), Climate Action (SDG 13), Life below Water (SDG 14) and Life and Land (SDG 15). CICERO Shades of Green rated OR’s green bond framework as “Dark Green”, the highest rating available.

    Prior to this transaction, OR had issued bonds amounting to ISK19.23 billion. OR’s entire financing goal for 2020 was worth ISK30 billion in bonds, bills and bank loans. The target was raised in April from an initial ISK13 billion assessment due to increased investments and dividend payments, refinancing of loans to owners and expectations of generally worse economic conditions.


    According to Reginn’s green bond framework, the funds will be used to invest in projects that contribute to five goals: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, waste prevention and recycling, pollution prevention and control, and protection of healthy ecosystems. The company targets SDG 7, SDG 9, SDG 11, SDG 12 and SDG 13. CICERO Shades of Green rated Reginn’s green bond framework as “Medium Green”, the second highest rating available.

    Reginn is the owner of Smáralind, Iceland‘s largest shopping mall, and the first real-estate property in Iceland to receive the BREEAM In-Use certification.

    Image by adriankirby 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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