Investors get chance to roll into new green bond as Swedish wind firm Arise refinances

Refinancing comes seven months before expiration

Swedish wind park developer Arise AB, which issued a three-year SEK350m (€38.2m) green bond in March 2012, is refinancing the bond seven months prior to expiration, meaning investors can either redeem their holdings or roll them over into a green bond yet to be issued.

According to the firm, its new bond will again be independently certified as green and have the same volume as the one issued in March 2012. Investors in the earlier bond have two weeks to decide to redeem their holdings or roll them over. Bookrunners for the new bond are ABG Sundal Collier, a Norwegian investment bank, and Swedbank.

Linus Hägg, Head of Corporate Finance at Arise, also said that as with the earlier bond, the investors would be chiefly Nordic institutions, notably pension funds and insurers. Arise itself has Swedish buffer fund AP3 as a 10% shareholder, though Hägg could not confirm that AP3 was a holder of its green bonds.

Other big shareholders in Arise include US investment bank JP Morgan with 14% of the firm; Norwegian power firm Statkraft with 7.5%; Swedish occupational pension provider Alecta with 4.3%; and Nordea Investment Management with 3.9%.Asked about the coupon, or interest rate, for the new bond, Hägg said it would be decided after the firm heard back from the previous bond’s investors.

The previous paper offered a coupon of 500 basis points above ‘Stibor,’ or the rate at which Swedish banks lend to each other without collateral.

Green certification of Arise’s latest paper will be done by DNV GL, an Oslo-based firm that is one of the few providers of the service in Europe. Others are CICERO, also based in Oslo, and Vigeo in Paris. According to Arise, DNV confirmed that the bond is consistent with the spirit of the Green Bond Principles (GBP), which were developed earlier this year by some of the world’s biggest banks.

In April, Arise issued a SEK1.1bn green bond that was secured against 10 of its wind parks in southern Sweden. As with the SEK350m issue, that bond was assured by DNV, though the sole bookrunner was Norwegian bank DNB.

Swedish wind parks developed by Arise so far have a combined capacity of 350MW. By 2017, the company aims to have 1GW of onshore wind power installed in the country and own half of that capacity. Link