KommuneKredit launches inaugural USD green bond
On Wednesday 25th October 2023, KommuneKredit priced a new USD 750 million November-27 green bond. The transaction constitutes KommuneKredit’s inaugural USD denominated Green Bond issue providing additional diversification to KommuneKredit’s green investor base.
Tuesday 24th November KommuneKredit announced an upcoming USD 4-year Green Bond issuance with initial-price-thoughts of SOFR MS+43bps area and size set at 750 million USD.
By the time books opened just after 09.00 CET on Wednesday morning, indications of interest exceeded USD 410 million (excl. JLM). Guidance was announced at SOFR MS+43bps area, same as IPTs.
The orderbook continued to grow throughout the morning. At 11:47 CET the spread was set at SOFR MS +43bp with investor interest above USD 820 million (including 50 million JLM interest).
At 12:30 CET orderbooks were closed for EMEA and Asian investors but kept open for American accounts until 14:30 CET. Books closed with final size above USD 960 million (excluding JLMs).
The quality of the book was high with Central Banks/Official Institutions and Banks & Bank Treasuries as the largest investor groups taking respectively 44% and 46% of final allocations and with Fund Managers taking 10%. In terms of geographical distribution, the transaction was well diversified with EMEA taking the major share of the transaction at 57%, Asian accounts 26% and Americas 17%. 66% of the issue was placed with ESG-investors.
Statement from KommuneKredit:
Helle Winther, Sustainable Finance Manager
“We are very pleased that the first green bond issued in USD under our updated Green Bond Framework has been well received in the market. Proceeds from KommuneKredit's green bonds are an important source of cost-efficient finance for a district heating infrastructure that transitions Danish energy consumption away from fossil fuels as well as for the sustainable water and wastewater management, which constitutes the bulk of our green loan portfolio.”
Lead Manager Quotes
“Huge congratulations to the KommuneKredit team for their inaugural Green USD transaction. A fantastic achievement to raise $750m in an untypical tenor and in a very challenging market backdrop, highlighting KommuneKredit’s demand from their global investor base. An extremely high quality orderbook supported this deal with over 90% placed with Central Banks, Official Institutions and Banks. Bank of America is extremely proud to have been part of this transaction and supporting KommuneKredit in their Green Bond journey.” Robert Matthews, Vice President, SSA DCM, BofA Securities
"Congratulations to the KommuneKredit team on a successful inaugural Green Dollar transaction, attracting an extremely high-quality order book supported by a diverse array of ESG investors at a very competitive pricing level. Barclays was honoured to have worked on this transaction.” Alex Paterson, Head of SSA DCM, Barclays
"Congratulations to the entire KommuneKredit team on the successful execution of their inaugural Green USD transaction. The particularly high-quality nature of this orderbook is a reflection of KommuneKredit's loyal investor-base and well-recognised green credentials. We are delighted to have participated in this transaction." Paul Eustace, Managing Director, Global Co-Head of SSA and Head of Europe and Asia Syndicate, TD Securities
“Congratulations to the KommuneKredit team on their first ever USD Green Bond issue. Despite a challenging market backdrop, affected by geopolitical events, the transaction attracted a high quality and granular order book further diversifying KommuneKredit’s Green Bond investor base globally. The outcome is a testament of KommuneKredit’s strong name recognition and successful sustainability work over the past years. Danske Bank was delighted to once again partner with KommuneKredit in raising cost efficient and sustainable funding for Danish municipalities and regions.” Gustav Landström, Head of SSA Origination at Danske Bank