Denmark’s statutory pensions giant ATP has invested in a new seven-year green bond issue from Nordic Investment Bank (NIB), as the fund’s total exposure to the environmental debt increased to 3.9% of its overall bond investments.
The DKK886bn (€118bn) labour-market supplementary pension fund did not disclose how much it had put in the issue, which carries a coupon of 0% and had a re-offer yield of 0.114%.
Lars Dreier Kristensen, senior portfolio manager at ATP, said: “NIB environmental bonds combined the strong credit strengths of NIB and the certainty that the funding is used to support sustainable environmentally-friendly projects in the Nordic and Baltic regions.”
NIB said there had been more than €2.9bn of orders for the bond when it was sold last week, meaning the deal was covered almost six times.
Pension funds and asset managers made up 36% of investors in the issue, followed by central banks and official institutions with 35% and other banks with 28%, according to NIB figures.
It said the bond proceeds would be used to finance selected projects judged to benefit the environment and contribute to climate change mitigation in the eight countries which own the NIB – Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden.
Separately, ATP confirmed that the green bond allocation within its overall bond investments had grown over the last year and was now 3.9% or DKK25bn, with the entire holding having been built up since 2017.
At the end of 2019, ATP’s total bond assets stood at DKK630bn.
Jan Ritter, head of hedging and treasury at ATP, said in an interview with Danish financial daily Børsen that the impact of the coronavirus pandemic on green bonds had been no milder or more severe than it was on other asset types.
“The ability to manage and trade the bonds is relatively intact,” he said. The market situation for green bonds had deteriorated in March, but eased up in early April, Ritter said.
Lead managers for NIB’s green bond issue were Bank of America subsidiary BofA Securities, France’s Crédit Agricole Corporate and Investment Bank and Nordic Bank Nordea.