Heimstaden Bostad AB Launches Inaugural Green bond

    Stockholm (NordSIP) –  On November 11th, Heimstaden Bostad AB priced an inaugural SEK1.2 billion Green senior unsecured bond. The dual-tranche transaction included a SEK400 million fixed-rate note that pays an annual coupon of 1.368% and a SEK800 million floating-rate note that pays 130 basis points (bps) over the 3 months STIBOR, 15bps below guidance. On the same day, Heimstaden Bostad AB also issued a dual-tranche NOK800 million senior unsecured (non-green) bond. Both transactions were heavily oversubscribed, with over 40 participants bidding over SEK4.3 billion.

    Heimstaden Bostad is a European real estate company headquartered in Malmö, Sweden. It focuses on acquiring, developing and managing and repositioning properties in growth areas. The company has approximately 101 thousand apartments and a property value of approximately SEK139 billion in Sweden, Denmark, Norway, the Netherlands, the Czech Republic. The company is owned by the Norwegian Fredensborg group and Alecta, and the corporate pension funds of Ericsson and Sandvik.

    Demand for the securities was dominated by domestic investors. For the green bond, investors domiciled in Sweden represented 95% of the fixed income bond and 62% of the floating rate note, leaving another 5% to Finnish investors and 35% to Norwegians, respectively. Sectorally, pension funds purchased 71% of the fixed-rate note leaving the remaining 29% to asset and fund managers. The latter purchased 94% of the floating rate note, leaving another 5% to retail investors and 1% to other miscellaneous creditors.

    “Heimstaden Bostad creates value by investing with an evergreen perspective and sustainability is an important part of this strategy,” said Arve Regland, CFO at Heimstaden. “We are therefore pleased at the strong demand we received for our first green bond, which is a confirmation of our ambitious sustainability efforts. The funds from this issuance will contribute to ongoing investments such as, energy-efficient buildings, renewable energy and clean transportation.”

    The proceeds from the Green bond issuance will be used according to Heimstaden Bostad’s Green Bond Framework dated October 2019, which has received a Medium Green label by CICERO Shades of Green.

    Danske Bank acted as green structuring advisor for the Green Bond Framework. Danske Bank, DNB Bank, Nordea and Swedbank acted as joint bookrunners for the bond issue.

    Image courtesy of Heimstaden Bostad AB

    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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