Stockholm (NordSIP) – The beginning of April saw the European Investment Bank (EIB) break new ground on a number of sustainable bond issuance fronts, including its first social bond denominated in SEK of 2025, and its inaugural
Folksam Invests in EIB’s Social Bond
The EIB issued a social bond on 4 April for SEK 2 billion. The bond matures in 2030, pays a 2.933% coupon and was priced at par. The transaction was managed by SEB and was the first EIB bond issuance denominated in Swedish Krona so far this year. This was the fourth issuance conducted under the EIB’s Sustainability Awareness Bond (SAB) framework.
Social bonds are funds earmarked to finance projects with positive social impacts. According to the EIB, SAB eligible objectives and activities covered by the Social factor of the Framework include projects focusing on water supply and management, wastewater collection and treatment, flood protection, education, health and housing. This investment will, among other things, contribute to projects to increase gender equality.
Folksam Group invested SEK370 million in EIB’s social via five different entities. The KPA Occupational pension insurance invested SEK162 million, Folksam Life invested SEK78 million, Folksam Occupational Pension invested SEK62 million, Folksam Item invested SEK48 million and Consumer Cooperative Pension Foundation invested SEK20 million.
“Gender equality is an important issue for the Folksam Group. Increased gender equality creates the conditions for long-term sustainable growth and reduced violence in relationships. In other words, it is a central issue for people’s safety,” says Marcus Blomberg, Head of Asset Management and Sustainability.
Two days prior to this bond, the EIB issued a NOK3 billion 5-year bond that paid a 4.329% coupon, its third NOK-denominated SAB transaction so far this year. At the time, that transaction was described as focusing on gender diversity and attracting investments from Nordea Liv, Sparebanken Møre, SpareBank 1 Nord-Norge, SpareBank 1 SMN, SpareBank 1 Sør-Norge, Sparebanken Vest, Sparebanken Øst and Sparebank 1 Østlandet.
These were not the only innovative bonds issued by the EIB in April.
EIB Issues Inaugural CAB Under European Green Bond Standards Format
On the same day that the EIB conducted its third NOK SAB transaction of 2025, the issuer also issued its inaugural Climate Awareness Bond (CAB) aligned with the European Green Bond Standard (‘EuGBS-aligned CAB’), worth €3 billion and due 15th May 2037. The bond, the largest so far issued under this standard, pays an annual coupon of 3.125% and was issued at a 99.627 discount, providing a spread of +50.7bps over the DBR 2.500% due 15th February 2035.
The mandate for the transaction was announced on Tuesday 1st of April. Books formally opened the following day with price guidance at mid-swaps +56bps area. Mid-morning, on the back of a robust and growing orderbook, the spread was set at mid-swaps +53bps, 3bps inside initial guidance. The final book size was in excess of €40 billion, including €1.45 billion in joint lead manager interest.
Most of the bonds were purchased by European investors, with investors domiciled in France, Germany and the UK purchasing 15%, 11% and 11% each respectively. Another 58% of the bonds were purchased by other miscellaneous European investors leaving another 2% to investors based in Asia and 3% for other miscellaneous investors from the rest of the world. Sectorally, bank treasuries were dominant, purchasing 46% of the securities. Fund managers accounted for another 38% of the bond demand, The finanl 16% went to central banks and or official institutions.
The proceeds will be allocated to disbursements under EIB’s lending to activities targeting the objectives referred to in Regulation (EU) 2020/852 (“EU Taxonomy Regulation”), with a primary but not exclusive focus on Climate Change Mitigation.
“Capital markets play a key role in the green transition towards a sustainable economy. As a pioneer of the green bond market, this transaction now brings the EIB’s high standards of quality, transparency and increased scale to the EU’s new European Green Bond Standard,” EIB President Nadia Calviño said
With this transaction, the EIB had completed around €35.8 billion equivalent of bond issuance year to date, equivalent to almost 60% of its €60 billion funding program for 2025.
