Stockholm (NordSIP) – On Thursday, November 18, Posten Norge issued its inaugural five-year dual-tranche green bond worth NOK1 billion. The issuer is the Norwegian postal service, a company owned by the Norwegian Ministry of Transport and Communications.
Of the total issuance amount, NOK700 million was issued through a fixed rate tranche that pays an annual 2.125% coupon, while the remaining NOK 300m was issued through a floating rate tranche that pays 46basis points (bps) over the 3-month Nibor. Handelsbanken Capital markets and SEB acted as Joint Lead Arrangers on this transaction. The new bond issues are expected to list on the Oslo stock exchange.
Demand for the green bond was robust. The fixed-rate tranche was priced at a 99.50 discount, 40bps over mid-swaps, to yield 2.233%. The floating rate note was priced at par with.
Less than one hour after being opened, the bookrunners announced that total books size exceeded NOK1.7 billion before reaching an excess of NOK2.1 billion, and spread guidance was revised downwards to 46-48bps over the 3-month Nibor from initial spread guidance of +48bps. Demand was heavily skewed towards Fixed-tranche throughout the transaction.
The Green Bond Framework
Funds from this green bond issuance will be channelled towards green projects as defined in Posten Norge green bond framework and support the group’s environmental strategy. The Green Bond Framework recognises projects in clean transportation, green buildings, pollution prevention and control, climate adaptation, renewable energy, eco-efficient and/or circular economy adapted products, production technologies and processes and energy efficiency. The borrower has listed a range of indicators, including greenhouse gas emission reductions, environmental certification, reduction in energy use, renewable energy generation. Norway Post will report on the environmental effects of the investments.
“We are the first Nordic logistics player to issue green bonds. The group aims to be the best at sustainable value creation and has an ambitious climate and environmental strategy. We are willing to invest heavily to achieve our sustainability goals and to gain momentum in our climate and environmental work,” said Tone Wille (Pictured), CEO of Posten Norge.
The green bond framework was reviewed by Cicero Shades of Green, which rated it as “Medium Green” in its second opinion, noting that its governance was “Excellent” and that it was in line with the green bond and green loan principles.