Stockholm (NordSIP) – Following the publication of its Green Bond Framework, Elopak, a Norwegian manufacturer of carton packaging for liquids, issued its first green bonds in May 2024. The bonds raised NOK2.5 billion in three tranches. Elopak operates in 40 countries, employs 2,700 people, runs 11 manufacturing units, and sells in excess of 14 billion cartons annually across more than 70 countries.
The Transaction
The first tranche was a NOK750 million, 3-year bond with a floating rate coupon of 120 basis points (bps) over the 3-month Nibor. The second tranche was a NOK 1.250 million, 5-year bond with a floating-rate coupon of 150 bps over the 3 months Nibor. The last tranche was a NOK500 million, 7-year bond with a fixed rate coupon of 5.48%.
Elopak has been rated BBB-/Stable by Nordic Credit Rating. Danske Bank and SEB acted as Joint Lead Managers and Green Bond Structuring Advisors for the transaction. Schjødt acted as legal counsel. The bonds will be listed on the Oslo Stock Exchange.
“We are very happy to announce the highly successful issue of our first green bond, on the basis of the highest ‘Dark Green’ sustainability rating from S&P. We welcome new investors and their confidence in our sustainable packaging journey to replace plastics with cartons,” says CFO Bent Axelsen. “These bonds will be instrumental in powering Elopak’s sustainability-driven growth strategy, helping us to make our cartons even more environmentally friendly and bringing our low-carbon packaging solutions to more markets around the world,” Axelsen adds.
The Green Bond Framewok
Elopak’s Green Bond Framework has been given a ‘Dark Green’ rating by S&P Global, the best possible rating in S&P’s “Shades of Green” methodology. The Framework is aligned with the ICMA Green Bond Principles and follows best market practices.
Green projects eligible for funding within the bond include circular economy-adapted (i.e.: recyclable and sustainable paper-based packaging) products, production technologies and processes and/or certified eco-efficient products, renewable energy, clean transportation, and energy efficiency. Under the circular economy, Elopak will finance e.g. production processes related to recyclable and sustainable paper-based packaging.
Another element that is relevant is Elopak willingness to use paper and packaging Certified by the Forest Stewardship Council (FSC), an organization that works to promote the practice of sustainable forestry worldwide. The Forest Stewardship Council sets standards for forest products, independently certifies that these standards have been met, and bestows labels upon the products that qualify. As NordSIP noted previously, although they look like cardboard, many “carton” products are not as easily recyclable as one would assume. This is due to their use of aluminium and polyethylene in order to be aseptic.
Elopak describes its Pure-Pak cartons, launched in August 2021, as “a naturally sustainable, convenient and consumer preferred alternative to plastic bottles,” that does not require the prolematic aluminium layer.
