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    Nordic Corporates Price Below ITPs

    Stockholm (NordSIP) – With the competing supply of many investment-grade corporate borrowers around the time of the ECB’s latest meeting, two issuers from Denmark and Norwegian took to the market to fund their contribution to the energy transition.

    Norwegian Rail and Real Estate

    On June 7th, Bane NOR Eiendom, which owns, develops and manages all railway related real estate in Norway, issued a NOK1.5 billion dual-tranche green bond. This was the company’s second green bond issuance and the first transaction for the company since being awarded a (A (stable) credit rating by Nordic Credit Rating. Danske Bank was Sole Bookrunner on this transaction.

    NOK750 million was issued via a three-year floating rate note priced to pay 103 basis points (bps) above the three-month Nibor, 2bps below initial price thoughts (ITPs). Another NOK750 million was issued via a five-year floating rate note priced to pay 126bps over the three-month Nibor, 4bps below ITPs. All investors in these transactions were overwhelmingly Norwegian asset managers. They accounted for all the investors in the three-year note as well as for 94% of the investors on the five-year note.Norwegian pension funds represented 5% of the investors in the five-year securities, while another 1% of those securities went to other miscellaneous investors.

    “The good credit rating helped when we entered the market. Uncertainty is relatively large in the capital market at the moment, so we are pleased to have found good investor interest and that the book ended at a solid NOK 1.8 billion. Our green profile clearly contributes to increased demand from investors,” Finance manager Sven Erik Pløen said.

    The proceeds from this transaction will be used to finance or refinanceprojects defined and described by the Bane NOR Eiendom Green Bond Framework, which was awarded a Medium Green rating by CICERO Shares of Green. Approximately one-third of the bond proceeds will be used for development projects such as Trondheim S and office buildings in Kristiansand. The rest goes to refinancing and repurchasing bond loans that fall due next year.

    “We work with green projects, both because they are BREEAM-certified, but also because they are at a crossroads and help more people take more trains,” says CEO Jon-Erik Lunøe. “By paying less interest, we can spend more on hub development, which is our mission,” Lunøe concluded.

    Ørsted Blows Away Investors

    On the same day that Bane NOR Eiendom came to the market, Denmark’s Ørsted also issued a €1.35 billion dual-tranche Green bond. The dual-tranche transaction was divdied into six- and eleven-year securities, worth €600 million and €750 million, respectively. Danske Bank, J.P. Morgan, NatWest and SEB acted as joint lead managers on this transaction.

    Ørsted is a Danish energy company focused on upstream renewable energy production, especially offshore and onshore wind, solar energy and bioenergy, and a growing position in energy storage and green hydrogen.

    The six-year green bond pays a 2.25% fixed rate coupon and was priced at a 99.562 discount, 57bps over mid-swaps, down from initial price thoughts of 85/90 bps over mid-swaps. 33% of the securities were purchased by investors domiciled in France, followed by 30% purchased by German, Austrian and Swiss investors and 19% by UK and Ireland-domiciled investors. The remaining 18% was split by investors from Nordic Southern Europe, Benelux and other miscellaneous jurisdictions.

    The eleven-year green bond pays a 2.875% fixed rate coupon and was priced at a 99.925 discount, 85bps over mid-swaps, down from initial price thoughts of 115 bps over mid-swaps. 39% of the securities were purchased by investors domiciled in France, followed by 25% purchased by German, Austrian and Swiss investors and 23% by UK and Ireland-domiciled investors. The remaining 13% was split by investors from Nordic Southern Europe, Benelux and other miscellaneous jurisdictions.

    Proceeds from this transaction will be channelled to finance Ørsted’s global build-out of renewable energy and green growth ambition of reaching approximately 50 GW of installed capacity by 2030.

     

    Image courtesy of Ørsted
    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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