Danske Bank helps Sweden to be the first Nordic country to issue green bond

UPDATED SEPTEMBER 1: Please see transaction details in the bottom of the article.
 
Sweden will be the first Nordic country to issue a green bond, which is expected to be record-breaking with up to SEK 20 bn. The funds will be used to meet Sweden's environmental and climate objectives.

In June 2020, the Swedish government announced their new green bond framework and the expenditure in the government budget to which the bond should be linked. The Swedish National Debt Office (Riksgälden) is now responsible for the issue, which is expected to be a record SEK 20bn.

"This is the first time Sweden issues a green bond and the ambition of attracting SEK 20bn makes it the largest green bond in Swedish kronor ever," says Lars Mac Key, responsible for sustainable bonds at Danske Bank.

Danske Bank is among the Joint Lead Managers whose task is to present and sell the bond to investors.

"What differentiates this green bond from other bonds is that investors can follow what government expenditure the bond is linked to and what environmental and climate effects the financing contributes to," says Lars Mac Key.

Countries like France, Belgium and the Netherlands have issued green bonds, but this is the first time Sweden, or any other Nordic country, issues a green bond. Denmark is currently working on the issuance of the country’s inaugural green bond, for which Danske Bank acts as advisor. 

The market for green bonds is growing rapidly. In 2019, USD 291bn were issued in green bonds. Early 2020, growth was temporarily halted because of the corona pandemic, only to get a fresh start after the summer.

 

Transaction details:

Issuer: Kingdom of Sweden
Issuer Rating:  Aaa / AAA / AAA (all stable)
Format:  Reg S / 144A
Size:  SEK 20,000,000,000
Pricing Date:  1 September 2020
Settlement Date:  9 September 2020 (T+6)
Maturity Date:  9 September 2030
Coupon:  0.125%
Reoffer Spread:  MS -32bp
Reoffer Price:  100.348%
Reoffer Yield  0.090%
ISIN:  XS2226974504 (RegS) / XS2226974413 (144A)
Joint Bookrunners:  Barclays, Danske, Natwest Markets, SEB, Swedbank
Use of Proceeds:  The use of proceeds of the Note will be used to fund Eligible Projects under the Green Bond Framework

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