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SEB supports MuniFins first Green Bond

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Nordic corporate bank SEB is acting as one of the lead managers for MuniFin’s inaugural USD500 million five-year RegS/144A Green Bond transaction.

SEB has supported MuniFin, the Finnish public sector lender, in its mission to create a Green Bond Framework that will enable the company to increase green lending to Finnish public entities.
 
The new issue has a final maturity of 21 September 2021, pays a semi-annual coupon of 1.375 per cent and has an issue price of 99.495 per cent to give a spread of +36.7 basis points over the UST 1.125 per cent due August 2021, equivalent to 33bps above mid-swaps.
 
The mandate was announced at 12:30pm London afternoon on 26 September together with IPTs of mid-swaps plus ‘33bps area’ for a USD500 million transaction.
 
Indications of interest (IOIs) grew throughout the day and night enabling a solid book opening at 8:25am London the following morning with IOIs just shy of USD400million. Official price guidance announced at mid-swaps plus 33bps area.
 
High quality investor support continued to accelerate through London morning, with books exceeding USD500 million by 09:00am London. Just before 13:00pm London a final update was sent out announcing closing of the books at 14:00pm London and with a spread fixed at mid-swaps plus 33bps.
 
The transaction was priced at 14.00pm London with total orders on the north side of USD600 million from 49 accounts.
 
MuniFin’s first Green bond received strong support from environmentally focused accounts including CalSTRS, Calvert, Mirova, NIB, Praxis Impact Bond Fund, Raiffeisen Capital Management, Swisscanto Funds and Syz AM.
 
In terms of investor breakdown, banks accounted for 36 per cent, central banks and official institutions accounted for 32 per cent of the deal, asset managers 21 per cent and pension funds and insurance companies accounted for 11 per cent of the investor breakdown. The geographical split was well diversified globally with 42 per cent placed into Europe, 29 per cent into the Americas, 22 per cent into Scandinavia and the final 7 per cent into Asia and the Pacific region.
 
“The success of Municipality Finance’s inaugural transaction, the first ever Finnish green bond, is testament to the considerable amount of time and resources the team have invested into developing their Green Bond product offering and investor base. They have been rewarded by the market with a fantastic trade with excellent investor diversification particularly from renowned environmentally focused accounts. A real result for all those involved,” says Martin Mills, head of green DCM EMEA at Bank of America Merrill Lynch.
 
“MuniFin created a Green Bond Framework that will enable them to increase green lending to Finnish public entities. Investors clearly supported this innovative, forward looking and improvement-based approach,” says Tanguy Claquin (pictured), head of sustainable banking at Crédit Agricole CIB.
 
“MuniFin achieved a very successful debut to the Green Bond market today, a result made even more notable given the surrounding market sentiment. The deal attracted a large, high quality and very granular orderbook and importantly saw strong participation from Green accounts, broadening and diversifying MuniFin’s investor base. This is an important milestone in promoting MuniFin’s Green lending in Finland and innovative Green loan scheme and is a testament to the diligent approach in establishing their framework and conducting marketing” says Ulrik Ross, Global head of public sector and sustainable financing at HSBC.
 
“We are absolutely delighted about MuniFin’s inaugural issue of their Green Bond. MuniFin’s undisputable good name and well-structured framework ensured this success and SEB is a proud partner to MuniFin,” says Hans Beyer, global head of financial institutions coverage at SEB.

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