Sandnes Sparebank raises green funding at Oslo Børs

Sandnes Sparebank today marked the admission to listing of its first green mortgage bond. The bond issue achieved a 'green' discount on its placing terms.

This bond issue attracted a lot of interest, and it was placed at a lower interest rate than would have been the case for a bond issue outside the green category.
"The issue went very well. There was good demand from investors, and the order book filled quickly. We estimate that the interest rate on this green issue was two basis points cheaper than for an ordinary bond issue", comments Carl Fredrik Hjelle, CFO of Sandnes Sparebank.
The bond loan has a total outstanding of NOK 300 million and an initial coupon rate of 0.77% (3M NIBOR + 0.42).
"I think you will see more green bond issues from us", adds the CFO.

In line with the bank's sustainability strategy
'If your home qualifies for a green mortgage, you will get the best borrowing terms', explains the bank's website.
"We have worked for quite some time on making it possible to offer green lending products for our customers. Offering our customers green mortgage loans is yet another milestone, and very much in line with the bank's sustainability strategy", explains Tove Linn Bjørnå, head of sustainability at Sandnes Sparebank.

Mortgage loans to finance energy-efficient homes
Sandnes Sparebank's green bond is what is known as a covered bond, and is issued by the bank's specialised residential mortgage institution SSB Boligkreditt. Covered bonds are often called mortgage bonds, because they are backed by mortgages.
The funds raised by issuing a green bond have to be used exclusively to finance environmentally-friendly projects. Green mortgage loans are provided to finance energy-efficient properties.

Strong growth in the green bond market
An ever-increasing number of borrowers are issuing green bonds, and so far this year the total outstanding value of green bonds listed at Oslo Børs has increased by 68.8% to NOK 60.5 billion. The supply of green bonds has also become more broadly based, with a number of companies from a range of different sectors using the green bond market to finance their sustainable projects.

 

Photo: Trygve Indrelid / NTB scanpix

Contact us

Geir Harald Aase