Stockholm (NordSIP) – On Thursday, October 21st, Kommuninvest issued a new SEK 5 billion green bond maturing in May 2029. This was the 14th green transaction for Kommuninvest, a municipal cooperation organisation established to finance Swedish local governments.
The bond pays a 0.875% annual coupon and was priced at a 99.827 discount to yield 0.899%, 8 basis points over mid-swaps. Danske Bank, Handelsbanken, and Swedbank acted as Joint Lead Managers in the transaction.
There was broad interest from investors. The final order books exceeded SEK10.5 billion. including 28 Swedish and international investors. According to Kommuninvest, “the successful outcome manifests fixed income investors neverending demand for Green Bonds and echoes Kommuninvest solid credit story and long track record within the bond market.”
Sectorally, pension and insurance companies purchased 36% of the bonds leaving the rest to asset managers (26%), banks (19%), central banks and official institutions (14%), and other miscellaneous investors (5%). Geographically, 63% of the bonds went to Swedish investors, while the rest of the Nordic countries took in 17%. UK and Ireland-domiciled investors purchased another 7% of the securities leaving the rest to other European (1%) and global investors (12%).
“Our Green Bonds continue to meet strong demand in the market. The slightly longer maturity that we opted for this time, at around 7,5 years, turned out to match well with investors’ preferences. Our Green Bonds Programme finances very solid sustainability efforts in the municipal sector. We have now reached a total of around 500 green investment projects,” says Tobias Landström, Deputy Head of Debt Management at Kommuninvest.
Kommuninvest issued its first Green Bond in 2016. Since then, it has become one of the largest Nordic green bond issuers. After today’s transaction, the issuer had the equivalent of SEK57 billion outstanding in eight Green Bonds denominated in SEK and USD. Kommuninvest’s Green Bond Framework allows financing in eight project categories. In the second opinion from CICERO, four of these are characterized as “dark green”, signalling investment projects aligned with the 2050 climate targets. Overall, the framework has a “medium green” shading
