Sweden’s biggest pension fund Alecta has ploughed SEK4.25bn (€413m) into the Swedish state’s first green bond issue, expanding its total investments in the environment-earmarked debt to SEK50bn, the fund said.
Swedish bank SEB said it acted as joint lead manager for the SEK20bn sovereign bond issue — 45.6% of which went to pension funds — as a part of a syndicate including Barclays, Danske Bank, NatWest Markets and Swedbank.
Carina Silberg, recently promoted to the role of head of corporate governance and sustainability at Alecta, said the pension fund had long been working to get Sweden to issue green bonds, because doing so was of great value in the transition to a more climate-adapted society.
“The fact that it is now happening – and with a clear framework and reporting structure – is very positive and a development that we are convinced that Swedish citizens and pension savers want to be part of,” she said.
Alecta said that with this investment, its green bond portfolio had grown to over SEK50bn.
More than 70 investors participated in the green bond issue which was part of the Swedish Debt Office’s Euro Medium Term Notes programme, with Swedish players making up 61.5% of these, according to SEB.
Alecta described the 10-year issuance as unique, in that investors were able to track the government spending linked to the bond, and which environmental goals it contributed to achieving.
Johan Bergström, acting head of funding at the Swedish National Debt Office, said: “Backed by Sweden’s high environmental and climate ambitions coupled with stable public finances, we have been able to offer a low-risk bond with a dark-green stamp of approval.”
This had attracted both traditional and new investors, he said.
Alecta said the bond issue had been classified as dark green by the Centre for International Climate and Environmental Research (CICERO), with this level recognised as the highest rating achievable for sustainable bonds.
Meanwhile, PFA in Denmark announced yesterday it has invested $30m in a dollar-denominated green bond issue from German state-owned bank KfW.
The 10-year $2bn issue was the issuer’s first dollar green bond, and the debt was bought by investors around the world, with 21% of buyers from the Americas, 23% in Asia and 17% in the UK. Scandinavian investors made up 10% of purchases.
Central banks and official institutions accounted for 43% of buyers, with pension funds and insurance companies taking a 9% slice of the issuance, according to KfW data.
PFA said the KfW green bond investment came two months after the pension fund’s purchase of €48.75m of a European Investment Bank (EIB) green bond issue, and that both investments came in the wake of the provider’s launch of its new climate pension product PFA Klima Plus in June.