Swedish construction firm Skanska issues bond linked to sustainable property

€95m issue allocated to green commercial property development

Skanska, the Sweden-based construction and development company, has issued an SEK850m (€94.8m) ‘green’ bond linked to sustainable commercial property development.

It is the company’s first green corporate bond and it said: “The invested capital will be exclusively allocated towards investments in green commercial property development.”

It said the issue would help it diversify its investor base – and be another way for investors to benefit from its leading position in green project development. The five-year bond was issued with Swedish bank SEB as sole bookrunner.

It’s the second green bond issued by a Swedish corporate, following a SEK1.5bn issue by forestry products group SCA last month. Figures compiled by advocacy group the Climate Bonds Initiative show that the first quarter of 2014 saw a record $9bn of green bond issuance.The initiative has raised its forecast for total issuance for the year to $40bn (from $20bn).

“The successful issuance confirms the capital market’s confidence in Skanska’s financial strength and continued long term commitment to a sustainable business model,” Stockholm-based Skanska said in a statement.

“There is an increasing interest in the investor market for not only earning a return on investment, but also contributing to a better environment,” said Chief Financial Officer Peter Wallin. It wants to be “the preferred choice” for investors seeking green investments.

Skanska, which built London’s landmark Gherkin building and which is involved in the restoration of the Ground Zero site in New York, said its Green Bond Framework is endorsed by the Centre for International Climate and Environmental Research (CICERO), an independent research centre associated with the University of Oslo.