Institutional investors snap up Nordic Investment Bank 20-year environmental bond

“Real money” buys into bank’s second environmental bond

Mostly Scandinavian investors have bought into a new 20-year environmental bond issued by the Nordic Investment Bank (NIB).
The SEK493.7m (€59.2m) issue this week matures in September 2032 and pays a coupon, or interest rate, of 2.75%.
Lead managers for the issue were Sweden’s Skandinaviska Enskilda Banken (SEB) and Bank of America Merrill Lynch.

“It was institutional real money buying,” said Christopher Flensborg, SEB’s Head of Sustainable Products, although he declined to name the investors.

The NIB, which has an explicit environmental mandate from its Nordic and Baltic owners to promote environmentally friendly projects, issued its first environmental bond in November 2011. It was for a four-year duration and was targeted at Japanese retail and institutional investors. It was arranged by Daiwa Securities Capital Markets Co.

“Addressing environmental challenges is a concern shared among a growing number of fixed-income investors worldwide,” said NIB’s Chief Financial Officer Lars Eibeholm at the time.NIB’s environmental bonds have already part-financed DONG Energy’s offshore wind farm project in Denmark’s Kattegat sea area. The 111-turbine, 400MW project is expected to be commissioned next year and is now 50% owned by Danish pension institutions PensionDanmark and PKA (Pensionskassernes Administration).

“It was institutional real money buying”

The Helsinki-based Nordic Investment Bank is owned by Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden and has lending operations in its member countries and emerging markets worldwide.
The NIB already makes environmental loans via its BASE (Baltic Sea Environment) and CLEERE (Climate Change, Energy Efficiency and Renewable Energy) programmes.
In separate news, Sweden-based Arise Windpower has concluded an agreement to buy a 40-turbine project in Solberg in central Sweden. Arise intends to build 23 turbines with a total capacity of 85MW, with an initial investment is estimated at SEK1.3bn. Link to NIB