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Green bond


First Finnish green bond was a success

Green bond logo

– It was a strategic decision for MuniFin to access the Green Bond markets. We wanted to offer a new product to the capital markets and further expand our investor base. We are extremely pleased with today’s transaction, which serves as a base to build future transactions on. Amongst the almost 50 investors that the transaction attracted, there were a very large number of new investors who have not invested in MuniFin before, says Esa Kallio, Executive Vice President, Head of Capital Markets.

– MuniFin’s lending portfolio carries an enormous potential for green investments. In the future we intend to become a frequent green bond issuer, Mr Kallio continues.

The lead managers of the transaction were Bank of America Merrill Lynch, Credit Agricole, HSBC and SEB.

Pioneer in Finland

MuniFin is the first Finnish green bond issuer. The company has offered green financing to its customers since early 2016. Green financing can be granted to projects that have clear and measurable environmentally friendly impacts. At the moment the green lending portfolio stands at EUR 400 million with additional projects in the pipeline.

The green projects are assessed and approved by an external Green Loan Committee. The financed projects need to fulfill the requirements of the MuniFin Green Bonds Framework.

– We want to raise environmental awareness in the Finnish public sector. The projects that are approved to our green portfolio are granted financing with a slightly smaller margin than others. By doing this we support our customers to meet their environmental and climate objectives and encourage the whole municipal sector to make environmentally friendly investment decisions, Esa Kallio says.

Details of the transaction

The first Finnish green bond was traded on September 27 and will settle on October 4, 2016. The 5-year green bond was priced 33 basis points over the 5-year USD mid-swap and pays a fixed coupon of 1.375 %. Re-offer price was 99.495 % and the spread over the 5-year Treasury bond was 36.7 basis points.

Investor demand was strong from the outset and the book reached oversubscription by Tuesday afternoon on September 27. The bond was well distributed around the globe. Europe excluding the Nordics accounted for 42 %, Americas 29 %, Nordics 22 % and Asia Pacific 7 %.

Further information:

Esa Kallio, Executive Vice President, Head of Capital Markets
Tel. +358 50 3377 953

Jukka Helminen, Executive Vice President, Customer Finance
Tel. + 358 50 5987 615