Landshypotek Bank issues the first ever green covered bond to finance sustainable forestry

Landshypotek Bank has priced the first green covered bond from a Swedish issuer, and the largest ever green bond in Swedish krona.The bond is backed by and aims to finance sustainable forestry in Sweden. It has been met by a great deal of interest both from investors in and outside of Sweden and the books was above 12 billion SEK after only half an hour. With an issue size of SEK 5.25 billion, it is the largest green issue ever made in the Swedish market.

There is substantial interest in green bonds and the offering has expanded over the last few years. The bonds are often based on defined projects that contribute to a particular, albeit isolated climate benefit for the future. Landshypotek Bank is the first to issue a green covered bond that exclusively finances sustainable forestry. The bond is based on the contributions of sustainable forestry to biodiversity and to lowering carbon dioxide levels in the atmosphere. 

Landshypotek Bank has extensive experience in financing forestry and the bank’s green investment specialists and forestry experts have collaborated on preparing a bond that is entirely backed by forest investments.

“It is very gratifying with the great interest, after only a half hour the books were above 12 billion SEK, which shows that investors see the economic and environmental potential of the Swedish forests. It is particularly gratifying to be the first to issue a green covered bond backed by Swedish forests. It is unique and is fully aligned with the bank’s operations to make a real impact in promoting a sustainable society based on entrepreneurial activity across the country. It is positive that investors can see the financial and environmental potential in Swedish forests,” says Martin Kihlberg, Chief Sustainability Officer and General Counsel at Landshypotek Bank. 

Landshypotek Bank has financed farming and forestry for almost 200 years. In the last few years, the bank has also presented savings accounts for the entire country and mortgages for houses outside the major cities. The green covered bond is the bank’s next step in this development.
The bond has been issued under a framework for green bonds that has been prepared pursuant to the Green Bond Principles and is based on sustainable forestry practices, renewable energy and energy-efficient buildings. The framework also received a second opinion from CICERO and was given a shading Dark Green.

The bond is backed by certified forests (PEFC/FSC) or forests with green forest management plans that include setting aside areas of particular conservation value. Properties must have 5 percent deciduous trees to promote increased diversification, increased biodiversity and storm protection.
The forests are privately owned and the bond is backed by forest holdings totalling 320,000 hectares, an area approximately the size of Gotland.  The forests encompass around 1.4 percent of Sweden’s productive forest and absorb slightly more than two million tonnes of carbon dioxide every year.

Landshypotek Bank’s green bonds mainly targeted institutional investors who wished to invest in projects that mitigate climate impact and that promote sustainable development in farming and forestry. Danske Bank was structuring advisor, Handelsbanken and Nordea was mandate as joint lead managers for the transaction. The bond amounts to SEK 5.25 billion and has a maturity of five years. 

For more information please contact:

Martin Kihlberg, Chief Sustainability Officer and General Counsel,

+46 (0)8 459 04 86 martin.kihlberg@landshypotek.se

Sofie Essayh, Communication and Press Officer,

+46 (0)70 2851363, sofie.essayh@landshypotek.se

Om Landshypotek Bank
Landshypotek Bank grundades 1836 och är en de tio största bankerna i Sverige. Banken har fokus på tjänster inom låna och spara. Kunderna lånar historiskt till jord och skog men nu även till hus. Banken ägs av 40 000 jord- och skogsbrukskunder, organiserade i en ekonomisk förening. Tillsammans stärker banken och kunderna de gröna näringarna och möjliggör därmed att vi alla kan ta del av närproducerad mat och svenska skogsråvaror. Landshypotek Bank har cirka 170 medarbetare på 19 orter i Sverige. 

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