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Daily CSR
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Finland’s MuniFin Set A ‘Bench-Mark’ For The Issuance Of ‘$500 Million’ On LSE’s Green Bond


MuniFin’s new bond under LSE’s “Green Bond Segment” gets “oversubscribed” in hours.

Dailycsr.com – 18 January 2017 – Roger Aitken reports that Municipality Finance started to trade on “London Stock Exchange” to “mark the listing of its first ever green bond”, whereby on the two hundred year old exchange, the size of issuance set a benchmark of “$500 million”. Municipality Finance is based out of Finland, while it is considered as the “leading provider of financial services in the country” that caters to the government as well as the “public housing sectors”.
The bond is of five years and it carries a “1.48% annual yield” which has been listed on the “Green Bond Segment” of LSE, the said category was introduced last year, as a result of which the investors and the issuers alike got the first ever options of “green fixed-income funding”. Global investors showed high support to the issue which was “oversubscribed” just in “few hours of the launch”.
MuniFin’s “ownership structure” also incorporates Finland’s government, “Finnish municipalities and public sector pension fund Keva”, whereby the company has plans of using the bond’s proceeds for investing in projects that promote the “transition to low carbon and climate resilient growth” all over Finland.
The Green Framework of MuniFin is responsible for identifying eligible projects. Green Framework was created in line with the “Green Bond Principles”, the latter being “a set of guidelines” that frames the “issuance of green bonds and “the Centre for International Climate and Environmental Research, Oslo”, wherein the “Stockholm Environment Institute” provides its collaborations.
The marking of the “new listing” and its trade opening at the exchange was celebrated in the presence of the Chief Executive Officer as well as the President of MuniFin, Pekka Averio who was accompanied by the Finnish Ministry of Environment’s “Permanent Secretary”, Hannele Pokka, along with the “Finnish embassy and joint lead banks”; whereby, Pekka Averio commented:
“Most of our lending portfolio consists of investments that could be categorised as socially or environmentally responsible. As we are one of the most important credit institutions in Finland, we feel that we have a central role in raising environmental awareness in the Finnish public sector and encouraging our customers to make more environmentally friendly investments.”
“Our aim is to support this change by offering a small margin discount for projects that are approved green financing. We have a long history with the London Stock Exchange in connection with our previous bond issues.”
Furthermore, Aitken writes that:
“Categories for investment consideration by MuniFin, which holds long-term credit ratings of ‘Aaa’ from Moody’s and ‘AA+’ from Standard & Poor’s, include renewable energy, public transport, sustainable buildings, water and wastewater management, energy efficiency and environmental management”.
Totally, the green project funding of MuniFin amounts to around “€400m”, while other investments are also under consideration for funding. The LSE Group’s “Director of International Development”, Nikhil Rathi, remarked”
“Finland’s first ever green bond has the potential to unlock and promote green financing across the country.”
According to Rathi, the “green bond platform” of LSE is considered to a “world leader” when it comes to “green and sustainable finance”, whereby enabling “international investment” across Japan, China and India. Moreover, Rathi also added:
“We believe there is an opportunity to be the funding partner of choice for the wider Nordic region. There is an undeniable shift in momentum in green and sustainable financing across the world and the LSE is uniquely placed…to support issuers and inventors in this green funding revolution.”