Swedish public sector lender Kommuninvest is gearing up to launch its inaugural green bond, a benchmark issue to help finance and refinance its green loan book.
"The bond is likely to be issued in US dollars, subject to market conditions," said Björn Bergstrand, senior investor relations manager at Kommuninvest. "Typically, we issue benchmark-size bonds with three to five-year maturities, and we don't expect this to change for the green bonds we issue."
The bank is currently presenting its green bond framework to investors.
The likely issue date of the bond is set for later in the quarter. The issuer also said, that it has the capacity to issue a $500 million bond, given the development of its green loan portfolio, but the final size and currency is yet to be determined.
"With our normal US dollar benchmark issues, we are out in the market once or twice a year, and I would expect that we could achieve something similar in the green bond space if the green loan book grows as we expect it to," said Bergstrand.
The lender has identified 12 projects in which it has SEK5.5 billion ($650 million) of committed funds, that are eligible for financing through the green bonds. However, the portfolio that the bond will lend against is expected to grow at the end of January when lender has its quarterly meeting to decide new projects to lend to.
Norway-based research firm Cicero provided a second opinion on Kommuninvest's green bond lending framework.
Last year, Norway's equivalent of Kommuninvest, Norges Kommunalbank (KBN), issued a similar $500 million green bond, its second, backed by green loans it had made to the countries local governments.KBN issued its first $500 million green bond in 2013.
Kommuninvest is Sweden's largest municipal lender, representing around 50% of all financing for local government.