The first green bond was issued in Sweden three years ago. So far green bonds have mainly been used to finance specific sustainability projects. Sveaskog is the first pure-play green forest company and can therefore use the bond loan for general financing of operations.
In its eligibility assessment of the company Norwegian DNV GL examined, among other things, Sveaskog’s sustainable forest production, certifications and nature conservation programme. DNV GL also placed considerable emphasis on forest climate benefits. In order to be designated as a pure-play green company, more than 90% of revenues must be derived from operations that have a clearly positive environmental impact.
“Forest management is a success factor for limiting climate impact,” says Per-Olof Wedin, CEO of Sveaskog. “The forest binds large amounts of carbon dioxide and it gives the greatest climate benefit through sustainable management that provides renewable wood raw material. Wood is better for the climate for everything from construction to green fuel. DNV GL has given us recognition for the benefits provided by our forests and our forest management.”
The bond, which immediately attracted considerable interest, has been placed with seven Swedish institutional investors.
The bond has a maturity of five years. It is issued under the company’s MTN programme and consists of two tranches. One tranche comprises SEK 300 million with floating interest of three months STIBOR +1.20% annually and one tranche of SEK 700 million with annual interest of 1.49%.
DNB acted as advisor and lead arranger of the green bond.
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