SRI investors make up 85% of buyers of Nordic Investment Bank’s $500m green bond

They include pension schemes AP2, CalSTRS and Local Government Super

The Nordic Investment Bank (NIB) says 85% of the buyers of its latest $500m (€392m) Environmental Bond were socially responsible investors, including Sweden’s AP2, Australia’s Local Government Super, France’s Mirova as well as BlackRock, CalSTRS, and Calvert of the US.

In all, NIB’s seven-year Environmental Bond was sold to 39 institutional investors earlier this week after being 1.6 times oversubscribed. It is rated triple ‘A’ and pays a semi-annual coupon, or interest rate, of 2.25%.

Banks made up the single biggest group of investors, accounting for 41% of the group, followed by central banks and public finance institutions (30%), asset managers (28%) and pension funds/insurers (1%). The bond’s bookruners were Bank of America/Merrill Lynch, Crédit Agricole and Sweden’s SEB.

“The success of the deal proves there is substantial demand for environmental bonds among fixed-income investors. The investors in the NIB Environmental Bondare supporting environmental projects in the Nordic-Baltic region,” said Henrik Normann, Chief Executive of NIB, in a statement.

Jens Hellerup, Head of Funding and Investor Relations at the NIB, also said the bank broadened its investor base with the green bond, as one-third of its investors were not prior buyers of NIB debt.

Helsinki-based NIB plans to use the bond’s proceeds to finance renewable energy projects, energy efficient buildings, biofuel- and electricity-based transport as well as wastewater treatment. The bond’s green credentials have also been independently verified by the Oslo-based Center for International Climate and Environmental Research (CICERO).

Also this week, Swedish wind power firm Arise said that it has presented a prospectus for its latest SEK350m (€38m) green bond. The move was necessary for the bond to be listed on the Nasdaq OMX exchange in Stockholm.