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Successful return to the Green Bond market for KBN

On 14th April 2021, KBN successfully priced a new USD 500mn long 3-year Green Bond.

15.04.2021 / News

The deal follows the recent update of KBN’s Green Bond Framework, which was published on April 8th, and marks the first public USD Green Bond from KBN since 2016.

"We are delighted to be back in the market with the first issuance under our updated green bond framework emphasising KBN's continued strategic focus on green finance. The excellent outcome of the trade also confirms the major shift by the investor community into high quality ESG assets", says Thomas Møller, Head of Funding & IR at KBN.

Books closed with a final size of USD 1.2bn (excl. JLM) for the capped deal size of USD 500mn.

The net proceeds from the Green Bond will be utilised according to KBN’s Green Bond Framework, which has received a governance score of “Excellent” and a “Medium Green” second opinion by Cicero Shades of Green. Through its Green Bond program, KBN aims to finance the Norwegian local government sector's transition to a climate-resilient, low-carbon society.

Demand was largely driven by Central Banks and Official Institutions, which received 67.5% of the final allocation. The deal was priced with a reoffer spread of MS-1bp, 3bps tighter vs. initial price thoughts (IPTs).

Distribution Stats

By Geography

 

By Investor Type

 

Americas

44.2%

CB/OI

67.5%

EMEA

34.4%

Fund Managers

20.6%

Asia

21.4%

Banks

6.6%

 

 

Pension Fund / Insurance 

5.3%

Quotes from the leads:

Credit Agricole CIB is extremely proud to have assisted KBN with its successful return to the public USD Green Bond market. KBN has deep roots in the Green Bond market and has continuously supported the development of this sector within the Nordic region and on a global scale. Today’s successful transaction, which follows the update of its Green Bond framework, was characterised by strong investor demand of the highest quality, and is a true tribute to the fantastic Green Bond work done by KBN over the years. Congratulations from CA-CIB!
Tanguy Claquin, Global Head of Sustainable Banking, Credit Agricole CIB

Being one of the first European issuers to issue a Green Bond in USD, KBN also provides the market
with best-in-class impact reporting as illustrated by winning the Environmental Finance’s Impact Report of the Year 2020 Award. With its longstanding green commitment coupled with its excellent credit quality, it is no surprise that KBN’s first USD green bond benchmark since 2016 received such an outstanding reception. Nordea is delighted to have participated in such a prestigious transaction.
Kamal Grossard-Amin, Managing Director and Head of SSA DCM at Nordea Bank

What an excellent return to the USD green market for KBN with this new long 3yr transaction. Amidst a busy backdrop it is very impressive that KBN achieved a negative spread to mid-swaps, driven by the exceptionality high quality orderbook from global investors. In particular, the noteworthy participation from green investors is a testament to the significant work and leading role KBN have played in the green bond market over the years. We applaud the full KBN team on this transaction and their new Green Bond Framework.
Laura Quinn, Managing Director, Head of Origination & Syndicate, TD Securities Dublin

Issuer:

KOMMUNALBANKEN NORWAY (KBN)

Rating:

Aaa/AAA (stable/stable)

Issue Amount:

USD 500mn (no-grow)

Pricing Date:

14th April 2021

Settlement Date:

21st April 2021

Coupon:

0.5% Fixed S/A, 30/360

Maturity:

21st October 2024

Reoffer Price:

99.675%

Reoffer Yield:

0.594%

Reoffer vs. Mid-Swaps:

MS-1bp

Reoffer vs Benchmark:

CT3+23.7bps

Lead Managers:

Crédit Agricole CIB, Nordea, TD Securities

 

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