Denmark recently announced the issuance of new green bonds worth 7.75 billion Danish kroner ($1.10 billion), slated for November 2033 maturity. The transaction was carried out through a syndicated process, as confirmed by one of the joint lead managers.
The demand for these green bonds reached DKK16.7 billion, which includes the interest expressed by the joint lead manager and other participants. It is worth noting that the final demand slightly fell short of the DKK18.4 billion initially anticipated during the book-building process.
Interestingly, the spread between the green bond and its conventional counterpart stands at minus 1.5 basis points, implying a 1.5 basis-point green premium. In other words, investors are willing to accept a yield 1.5 basis points lower than that offered by the conventional twin. The bond was ultimately priced at 93.096, yielding 3.053%.
The issuance of green bonds in Denmark follows the country’s “twin bond” concept, which mirrors the approach taken by the German Finance Agency. Under this concept, the green and conventional bonds share the same coupon rate and maturity. Notably, this marks Denmark’s second foray into green government bonds.
The lead managers responsible for facilitating this transaction include Danske Bank, J.P. Morgan, Nordea, and SEB.
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