Ericsson Joins Green Bond Market

    Stockholm (NordSIP) – On November 22rd, Swedish telecoms company Ericsson issued its inaugural green bond. The security is worth €500 million and matures in May 2028. The issue was said to follow “a well-attended road show, where Ericsson presented its business strategy and how it is linked to the Company’s ESG targets.”

    Ericsson is one of the world’s leading providers of Information and Communications Technology, and as of year-end 2022 the group employed more than 100,000 people and served customers in 180 countries. Ericsson is a leader in wireless technologies, owning the majority of 5G networks across the globe. This was the first time since 2022 that Ericsson came to the market.

    “The successful placement of this green bond confirms the market confidence in Ericsson’s long-term competitiveness and in our strong sustainability ambitions. Issuing the bond is a direct consequence of our work to fully integrate sustainability into our finance operations, including last year’s launch of our Green Financing Framework. The proceeds raised will support R&D investments in enhanced energy performance in both existing and future solutions. This will strengthen operators’ competitiveness and enable further societal climate action through solutions made possible by mobile connectivity,” Ericsson’s CFO, Carl Mellander, commented on this occasion.

    The bond pays a 5.375% coupon and was issued under Ericsson’s Euro Medium Term Note Program (EMTN) to offer a yield at issuance of 5.437%. Strong demand swelled final books to over €1.7 billion and allowed the security to be priced at 235 basis points (bps) over midswaps, 30bps below initial price talks. Geographically, demand was dominated by Nordic investors, who purchased a third of the green bonds, leaving the rest to investors domiciled in the UK and Ireland (26%), Germany, Austria and Switzerland (20%), Southern Europe (9%), France (8%) and other miscellaneous investors (5%). Sectorally, fund managers completely dominated the demand, purchasing 78% of the securities. Banks (12%), insurance companies and pension funds (6%), and other investor groups (5%) took the remaining. Citi, Credit Agricole CIB, Danske Bank, Deutsche Bank and SEB acted as joint bookrunners.

    The proceeds will be exclusively allocated to investments in energy efficiency. “Ericsson’s Green Financing Framework enables the Company to issue green bonds and other green financing instruments. The proceeds will be exclusively allocated to investments in energy efficiency and renewable energy. The framework was developed in accordance with the 2021 ICMA Green Bond Principles (GBP). CICERO Shades of Green, a leading global provider of assessments related to green and sustainable financing, and part of S&P Global since December 2022, acted as second party opinion provider,” Ericsson explained.

    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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