SEB arranges issue of ALTUM EUR 20m Green bonds

SEB bank has arranged issue of EUR 20 million Green bonds for the state-owned development finance institution ALTUM. Thus, ALTUM becomes the first national development finance institution in Central and Eastern Europe to issue green bonds.

SEB bank has arranged issue of EUR 20 million Green bonds for the state-owned development finance institution ALTUM. Thus, ALTUM becomes the first national development finance institution in Central and Eastern Europe to attract funding from capital markets by issuing green bonds.

Maturity of ALTUM green bonds has been set at 7 years with a coupon rate 1.3% and final yield to maturity at 1.367%. The bonds will be listed on Nasdaq Riga.

This transaction has attracted investors from Latvia, Lithuania, Estonia, Germany and Sweden. Asset managers, pension funds, insurance companies and banks oversubscribed the bond issue by 6.5 times.

The financing attracted through green bonds will be used to diversify ALTUM's financing structure and ensure state support to viable business projects in the fields of energy efficiency, renewable energy, renovation on residential and commercial buildings, sustainable transportation and other areas. The international credit ratings agency Moody's has assigned an investment grade rating Baa1 to ALTUM, confirming its solid financial position.

Ints Krasts, board member of SEB Latvia: "Financial markets set high standards for bond issuers in terms of corporate governance, financial stability, sustainability and other areas. Standards to issue green bonds are even more demanding in terms of social responsibility and environmental protection. Therefore, I am glad that with the help of SEB’s team of professionals, ALTUM succeeded to meet all the requirements, and I would like to congratulate the company with a very successful debut in the capital markets.

Besides, the high demand from investors for ALTUM's debt securities confirms the good timing chosen for such transaction. This deal is also contributes to shaping ALTUM’s reputation in international markets, and it is an important milestone in developing the Latvian capital market, broadening opportunities for investors to invest in socially and environmentally meaningful projects".

SEB group and World Bank developed the concept of green bonds in 2007. Issuers of green bonds are required to invest their financing only in environmentally friendly projects, which contribute to promotion of renewable energy, energy efficiency and environmental protection. SEB has arranged green bonds for more than 50 issuers and attracted over USD 16.5 billion in financing.
The independent expert - Center for International Climate and Environmental Research in Oslo (CICERO), has assessed and approved correspondence of ALTUM’s green bonds to principles of environmental protection and climate change mitigation.

In 2016 SEB concluded issue of EUR 100 million green bonds for energy company Latvenergo. This was the first state owned company in Eastern Europe to issue green bonds, and it received high demand from investors. This year Latvenergo became the first company in Baltics to receive Nasdaq Best Investor relations award for bond issuers.