01 Sep 2020 17:51

SEB took part in issuance of Sweden’s first sovereign green bond

SEB acted joint lead manager in the issuance of Sweden’s first sovereign green bond, which was completed on Tuesday. The 20 billion kronor that was emitted will be linked to expenditures that contribute to achieving Sweden’s environmental and climate goals.

The bond has a maturity of ten years and is the largest green bond to date issued in the Nordic region and in Nordic currency. The interest among investors was large and the bond, which was oversubscribed more than twice, was priced with a yield of 0.09 percent and a current coupon rate of 0.125 percent.

Sweden’s Sovereign Green Bond Framework was rated “dark green” – the highest grade – by second-opinion provider Cicero. The government's ambition has been to offer investors exposure to a sovereign green bond with the highest credit rating and expenses that are the greenest of the green SEB has acted as structural advisor in the work of developing the framework.

The framework is based on Sweden’s environmental objectives system, which is broadly rooted in the Swedish political system. This ensures that the proceeds only will be used for expenses that contribute to one or more of the environmental goals, do not contribute negatively to other environmental goals and in all probability contribute to a long-term net positive effect on the environment. The overarching goal is to hand over an environment to the next generation where all major environmental challenges have been resolved.

This includes, for example, expenditures aimed at mitigating climate change, strengthening biodiversity, promoting renewable energy projects or reducing carbon dioxide emissions in the transport sector. The Swedish National Debt Office will, in collaboration with the Swedish Environmental Protection Agency, produce an annual investor report.

The green bond was issued through a syndication with SEB, Barclays, Danske Bank, NatWest Markets and Swedbank as joint lead managers of the transaction.

In total, over 70 investors participated in the bond, which was distributed as follows:

Sweden 61,5%
UK 17,9%
EMEA 8,4%
Other Nordics 7,2%
Americas 4,5%
Asia 0,5%

Pension Funds 45,6%
Asset Managers 32,9%
Insurance 8,5%
Bank Treasuries 8,1%
Other 4,9%

Read press release from the Swedish National Debt Office