New green bond issued by KBN
On 21 August, KBN successfully launched its inaugural SEK 2 billion 7-year Green bond due 28th August 2026. After officially announcing the mandate on Tuesday 20 August, the orderbook opened on Wednesday morning and quickly attracted the interest of major SEK investors. After an hour and half of book building, orderbooks were above the SEK 1 billion minimum size. Due to continued interest throughout the early afternoon, the size and spread were set at Mid Swaps +15bps and SEK 2 billion. Domestic Swedish investors drove the deal and were allocated 51% of the trade. Followed by investors from Denmark and France, taking 30% and 13% respectively. Insurance companies and pension funds accounted for half the amount raised followed by Banks with 30%.
This is the seventh green bond KBN has issued. KBN’s previous green bond, which was issued in Australian dollars (AUD), was crowned SSA Kangaroo Bond Deal of the Year by KangaNews, a leading Australian capital markets publication. Our other green bonds have been issued in US dollars and Norwegian kroner.
The funds from KBN’s green bonds are earmarked exclusively for climate and environmentally friendly projects in Norway. Our Green Bond Framework has been rated "dark green", which is the highest possible rating, by the CICERO research centre. This means that the investments we finance with green bonds are in line with an emissions pathway that will lead to a low-carbon society.
KBN produces a separate environmental impact report each year on the impact of its green loans. This report provides investors with extensive information about the projects financed by the green bonds, including their environmental impact in terms of greenhouse gas emissions avoided or saved.
Issuer: Kommunalbanken Maturity: 28 August 2026
Rating: Aaa/AAA Re-offer Price: 99.722%
Issue Amount: SEK 2 billion Re-offer Yield: 0.165%
Settlement Date: 28 August 2019 Re-offer vs. MS: +15 bps
Coupon: 0.125% (annual/unadjusted) Denomination: SEK 2m + 2m
Lead: Danske Bank ISIN: XS2047497289
- 100% central government owned Kommunalbanken is classified as an instrument of the state serving a public policy function of providing low cost funding to the Norwegian local government sector.
- Kommunalbanken is the largest lender to Norwegian municipalities, providing close to 50% of total credit to the sector.
- KBN was one of the first European SSA issuers to launch a public green bond earmarked for green projects. In 2013, with increasing global demand for sustainable and responsible investments and projects with a climate benefit, KBN completed its inaugural public US dollar green bond. Since then KBN has issued a further two public US dollar green bonds, two public NOK denominated green bonds totalling NOK 1.35bn and a AUD denominated green bond, which raised a total of AUD 450m.