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​ATP, PKA invest in European Investment Bank’s DKK3bn climate bond

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Danish pension funds ATP and PKA have invested in the European Investment Bank’s (EIB) DKK3bn (€402m) green bond issue, launched last Thursday.

It is the first green bond issued in Danish kroner by a sovereign, supranational or agency (SSA) issuer, and is also a “climate awareness bond”, with Danske Bank leading the issue.

ATP declined to say how much it had invested in the bond, but senior portfolio manager Lars Dreier said the pension fund valued the bonds for the transparency and accountability they generated in sustainable finance.

“We acknowledge EIB’s effort to align with the EU Green Bond Standard via linking to the EU sustainability taxonomy and the external verification of both allocation and impact reports,” he said.

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Michael Nellemann Pedersen, CIO of PKA – which manages four Danish labour-market pension funds – added that, as a long-term sustainable investor, his firm was looking for further clarity in sustainable finance.

The EIB said it was the first issuer to link the use of green bond proceeds to activities that contribute to climate change mitigation, and hoped that this would start the ball rolling on an extension of eligibility criteria within evolving EU legislation.

Eila Kreivi, director and head of capital markets at the EIB, said: “The strong response to this rare transaction proves the attention of long-term sustainable investment to the EU initiatives on sustainable finance, notably the relevance of the EU sustainability taxonomy.”

The bond issue was led by Danske Bank as sole lead manager, with a number of its domestic investor clients buying the bonds.

Bo Søndergaard, head of SRI bond marketing at Danske Bank, told IPE that, not only was it the first climate awareness bond to be issued in Danish kroner by the EIB, but it was also the largest green bond in the Danish market.

“It is quite a milestone transaction as the EIB has not done a Danish kroner bond for the last 10 years,” he said. “Demand for this issue was strong and driven by increased interest from Danish and international accounts in buying green bonds, and of course a number of the participants have a natural need for long-term bonds.”

The bond runs until 14 November 2031. The EIB said it was priced with a spread of 40bps below mid-swaps, equivalent to 27.7bps over the Danish government bond due 15 November 2029.

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