Buoyant Demand for Elekta’s Cancer SLB

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    Stockholm (NordSIP) – As the private sector races to embrace sustainability goals, climate change objectives have remained the dominant focus. However, the last two years of the COVID-19 pandemic have highlighted and exacerbated the wide range of social disparities and injustices that remain unaddressed in society.

    To address these issues, Elekta, a medical equipment company providing clinical solutions and software for treating cancer and brain disorders, announced the issuance of SEK1.5 billion in dual-tranche sustainability-linked bonds (SLBs) under its MTN-Program. Elekta supplies equipment to over 7,000 hospitals globally and over 2 million patients are treated every year with one of its solutions. Among other products, Elektra manufactures A medical linear accelerators (LINACs), a device used for external beam radiation treatments of patients with cancer. In July 2021, Elekta was the first company in Sweden to establish a new Sustainabilty-Linked Bond Framework with a pure social KPI – to contribute to increasing the global access of cancer care in underserved markets. This is the first transaction under this framework.

    - Partner Message -

    “Sustainability is a central part of Elekta’s strategic framework,” says Johan Adebäck, Elekta’s CFO. “The sustainability-linked bond highlights this commitment to our ESG agenda and will demonstrate our progress in achieving the goal in a clear and transparent way. It also gives investors an opportunity to contribute to the structural inequalities in access to cancer care across the globe. Today’s successful bond issue proves that the financial market wants to be part of our ambitious sustainability work.”

    SLB Terms

    Of that total amount borrowed in senior unsecured SLBs, SEK1.15 million was issued through a five-year floating-rate note (FRN) that pays a coupon of 90 basis points (bs) over the 3 months STIBOR. The remaining SEK350 million was issued via a seven-year fixed-rate note was priced at 125bps over mid-swaps to pay a 1.925% annual coupon. Danske Bank and SEB acted as Joint Lead Managers in the transaction and Danske Bank acted as Sustainability Structuring Advisor.

    Strong demand left the order book two times oversubscribed and allowed the pricing of the FRN coupon and of the fixed-rate note to tighten to the lower end of their initial price guidance of 95-100bps spread over the 3-month Stibor and 125-130bps over mid-swaps.

    Swedish investors were dominant. They purchased the entirety of the seven-year fixed rate note and and 83% of the FRN, which saw the rest of the bonds going to Norwegian (13%) and Finnish (4%) investors. Sectorally, asset managers swept up 67% of the FRNs, followed by 28% which went to pension and insurance companies, and 5% that went to other undisclosed investor groups. Asset managers took 50% of the seven-year note, leaving the other half to pension funds and insurance companies.


    The bonds are guided by Elekta’s Sustainability-Linked Bond Framework and Elekta is the first company in Sweden to issue this type of security based on a pure social key performance indicator. The funds are intended to contribute to closing the global access gap within radiation therapy, fully aligned with Elekta’s vision – a world where everyone has access to the best cancer care.

    SLBs are set in such a way as to create a financial incentive for the borrower to improve its sustainability profile on some pre-arranged metric. Should such target not be met, the cost of borrowing will go up at some pre-arranged date.

    In Elekta’s case, the borrower has committed to increase the number of LINACs installed base in underserved markets by 825 units by the April 30, 2025, in comparison to an April 30, 2020 baseline. Should the issuer fail to meet this goal, the redemption price will increase to 101% on the FRN maturing in December 2026, while the fixed-rate coupon on the seven-year tranche will increase by 35bps from the first coupon period after the reporting end date.

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