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Nordea helps EIB issue first Swedish krona sustainability awareness bond

Nordea helps EIB issue first Swedish krona sustainability awareness bond

The European Investment Bank issued the first ever Swedish krona sustainability awareness bond this month, with the help of Nordea.
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The European Investment Bank has issued its first ever Swedish krona sustainability awareness bond (SAB), with Nordea as joint lead manager. It follows from its previous EUR SAB issuance earlier this year, and last year.

The proceeds from the transaction, which took place on September 9, will be directed towards investments targetting a broader spectrum of sustainability objectives, including social. Activities under the EIB’s SAB include a range of areas, including two recent additions within health and education.

The seven-year bond matures on September 21, 2026.

Sustainability beyond climate

“Sustainable development requires rapid redirection of financial flows towards sustainable investment, helped by capital markets and facilitated by a common language in sustainable finance,” said Aldo Romani, head of sustainability funding at the EIB. “Together with the SAB-tap in EUR last week, this transaction highlights EIB’s willingness to provide markets with clarity on its social lending activities.

“This transaction emphasises the increasing attention of Nordic investors to the whole spectrum of sustainability objectives in addition to climate,” said Romani. “By extending SAB-monitoring to health and education, EIB intends to contribute a test-case to the upcoming dialogue on sustainability beyond climate.”

Understanding sustainability bonds
‘Sustainability bonds’ are similar to ‘green bonds’ but target broader sustainability objectives (including social), instead of strictly climate or environmental objectives.

Sustainability bonds are a recent, but fast growing, part of the market and was adopted in market parlance back in 2017 through the establishment of ‘Sustainability Bond Guidelines’.

For more on sustainability bonds please see here.

Leadership

“The EIB has been a pioneer and leader in the green bond market for many years,” said Jacob Michaelsen, Nordea’s head of sustainable bonds. “With the SABs, they have again demonstrated leadership within sustainable finance and we are proud to have helped spread the message to the Swedish market, and lead the first ever Swedish krona SAB.”

The Swedish market has previously this year seen two other sustainability bonds come to market.

In April, Swedish real estate company Trianon issued the world’s first sustainability bond in a hybrid format, with proceeds targetting both green buildings and affordable housing. The following month, South American telecom operator Millicom issued a SEK 2 billion sustainability bond. Here the proceeds targeted both energy efficiencies in the grid but also the expansion of high-speed internet to areas with no or low-speed connections.

Nordea is proud to have been leading both transactions and the structuring of the frameworks, said Michaelsen.

  • For more, see the EIB press release in full here

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