🇫🇮 NIB’s EUR 500 million Environmental Bond attracts strong global demand

By Arctic Business Journal - January 19, 2024
Windmills for electric power production. Arctic View, Havoysund, Northern Norway aerial photography.

On 17 January, the Nordic Investment Bank (NIB) launched a new seven-year fixed-rate EUR 500 million Environmental Bond (NEB), with proceeds dedicated to projects offering substantial environmental benefits. The issuance elevates NIB’s 2024 green bond total to EUR 720 million, building on earlier NOK 2.5 billion NEB issuance. Demonstrating NIB’s strong capability in sustainable financing, these issuances showcase the Bank’s commitment to further expanding its Environmental Bond offerings throughout the year.

The bond attracted a high-quality order book, with the final book exceeding EUR 1.3 billion and participation from more than 40 accounts. This demonstrates a well-diversified investor base, comprising central banks and other official institutions (40%), asset managers (29%), bank treasuries (29%), and other investor types (2%). A wide geographical spread of investors underlines the bond’s global appeal.

The joint-lead managers for the transaction are Credit Agricole CIB, Danske Bank and Natixis.

The NEB, offering a fixed annual coupon of 2.625%, was initially offered at MS+8 basis points but, due to high investor demand, the re-offer tightened to MS+6 basis points. This adjustment resulted in a price of 99.773 and a yield of 2.661%. The pricing of the bond was carefully tailored to align with market conditions and investor expectations.

“Despite the high supply in EUR from SSA peers early in the year, we were happy to see how sustainable investors support the NIB’s Environmental mandate. With a book which was 2.5 times oversubscribed, it is clear that the NIB Environmental Bonds are appealing to the investors.  We have been following the market since the beginning of the year and the strategy to find a day where there was not too much competing supply from our peers worked very well,” says Jens Hellerup, Head of Funding and Investor Relations at NIB.

“Financing environmental projects is crucial to NIB’s mandate. NEB bonds enable us to link this important mandate with the liability side. This green EUR benchmark bonds follows a Norwegian kroner denominated NEB benchmark we placed earlier in the year. The reason why NIB can issue green bonds already so early in the year, is that we experience record demand for loans to environmental projects. It is encouraging to see sustainability focused investors’ strong support for our investments,” says Kim Skov Jensen, NIB’s Vice President & CFO.

“NIB issued yet another successful Environmental bond in returning to the Euro market and demonstrated the strong interest from this investor base for the name. Congratulations are owed to the funding team which not only navigated a busy beginning of year to take a window of limited supply but targeted the significant demand from high-quality accounts on this part of the curve. The adaptability of NIB to strategically position this trade to take advantage of the conditions, without compromising on pricing objectives was executed with a precision that will not only extend the Euro curve but prepare it for a future Euro benchmark. It was an absolute pleasure for Natixis to partner with NIB on this transaction and we look forward to achievements by this issuer in 2024,” says Emmanuel Smiecench, Co-head Public Sector Origination & Syndication, at Natixis.

“Congratulations to the NIB team on another fantastic result in the EUR market issuing an over two times oversubscribed 7-year Environmental Bond at a level in line with leading EUR benchmark issuers. Despite a busy primary market in EUR, NIB managed to attract top quality investor demand thanks to its high quality and well proven NEB program and top credit quality. Danske Bank is proud to have supported NIB on another successful NEB transaction,” says Gustav Landström, Head of SSA Origination at Danske Bank.

“We would like to congratulate the NIB team for today’s successful return to the Green Bond market. The new EUR 500mn 7-year Nordic Environmental Bond appealed to a wide range of investors, as demonstrated by the exceptionally high-quality and oversubscribed orderbook. CACIB was very pleased to be part of this successful benchmark,” says Lawrence Duquesne-Garner, Managing Director, SSA DCM Origination, at Credit Agricole CIB.

NIB reports on the impact for each project financed and the aggregated impact for the seven different financing categories. The impact tables as well as the list of all projects financed are available on the Bank’s website. See more information on NIB Environmental Bonds.

Bond summary terms:
Issuer: Nordic Investment Bank
Rating: Aaa / AAA by Moody’s / S&P
Issue amount: EUR 500 million
Coupon: 2.625%, Fixed, Annual, ACT/ACT
Launch date: 17 January 2024
Payment date: 24 January 2024
Maturity date: 24 January 2031
Re-offer: MS+6bps / 99.773 / 2.661%
Listing: Nasdaq Helsinki
Lead manager: Credit Agricole CIB / Danske Bank / Natixis
ISIN: XS2753549703

NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

For further information, please contact

Jens Hellerup, Senior Director, Head of Funding and Investor Relations, at +358 961 811 401, [email protected]

Angela Brusas, Director, Funding and Investor Relations, at +358 961 811 403, [email protected]

Alexander Ruf, Director, Funding and Investor Relations, at +358 961 811 402, [email protected]

Originally published on 18 January by Nordic Investment Bank.

Announcements are published as a service to readers. The sender is responsible for all content.

Announcements for publication can be submitted to [email protected].