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Landmark inaugural green transaction as KBN returns to the Canadian dollar market

The CAD500 million deal size marks KBN’s largest ever CAD Benchmark

11.10.2021 / Nyheter

On Thursday 7th October, KBN priced their inaugural CAD Green Bond; a CAD500 million 3-year Green RegS/144a Benchmark at MS-24bps, equivalent to CAN 1.500% Sep-24 + 24.4bps.

- After an eight years hiatus from the CAD market we are finally back with a landmark inaugural CAD 500 mill. green transaction under our newly updated green bond framework, says Thomas Møller, Head of Funding & IR at KBN. 

The transaction enjoyed a very strong reception from the outset, with indications of interest in excess of CAD510 million. Orderbooks ultimately closed in excess of CAD600 million (incl. C$75m JLM interest). Final pricing of MS-24bps represents one of the tightest ever SSA CAD Benchmarks.

- This is an important transaction for the continuous development of our green bond program diversifying into yet another market with a strong ESG focus. Given our continuous dialogue with the Canadian investors over the years we are very pleased to see an over 50% domestic Canada allocation in the transaction, says Møller. 

In terms of distribution by investor type, Banks & Bank Treasuries were the largest investor component taking 35% of final allocations, supplemented by strong participation from Fund Manager / Insurance / Pension Fund Accounts (34%) and Central Banks & Official Institutions (31%). In terms of geography, the transaction was well placed amongst Domestic investors (54%), Americas ex. Canada (15%), EMEA 19% and Asia accounts (12%).

Reactions:
- It has taken KBN 8 years before returning to the Canadian dollar market, but it was worth the wait. The issuer has constantly stayed in close dialogue with domestic investors in recent years, enabling the funding team to seize this perfect window of execution just when all the stars were aligned. And the Green Bond format gave them this extra attention from the investor community to make this transaction a great success. Congratulations!
Anthony Vivès de Montal, Executive Director, CIBC Capital Markets

- Congratulations to the KBN team on a truly fantastic inaugural Canadian Dollar Green Bond! This exceptional result is a clear testament to KBN’s unwavering commitment to global investor relations and their dynamic approach to accessing a broad array of capital markets. The transaction was perfectly timed to take advantage of the favourable market conditions in the Canadian Dollar market, with broad based investor demand from across all key segments. RBC was delighted to be a bookrunner on such a milestone transaction.
James Taunton, Director, SSA DCM, RBC Capital Markets

- Congratulations to the KBN team on a record-setting return to the Canadian market with their inaugural CAD denominated Green issuance. Scotiabank was pleased to assist KBN on its largest CAD issuance to date, attracting strong demand from a broad range of global investors particularly ESG and green-dedicated funds.
Bob Nguyen, Global Head of Fixed Income Origination, Scotiabank / Cesare Roselli, Global Head of SSA Origination atScotiabank / Alberto Procario, Director, SSA Origination at Scotiabank

Final Terms
Borrower: Kommunalbanken Norway (KBN), 100% owned by Kingdom of Norway
Ratings: Aaa (Stable) / AAA (Stable) by Moody’s / S&P
Format: RegS / 144A
Coupon: 1.000%, Fixed, S/A, 30/360
Size: CAD500 million
Pricing Date: 7 October 2021
Payment Date: 18 October 2021 (T+6)
Maturity Date: 18 October 2024
Re-Offer Spread: MS-24bps | CAN 1.500% Sep-24 + 24.4bps
Joint Lead Managers: CIBC Capital Markets, RBC Capital Markets (B&D), Scotiabank

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