Heimstaden Bostad has successfully priced SEK 1.5 billion in green senior unsecured notes, consisting of SEK 750 million in fixed-rate notes and SEK 750 million in floating-rate notes. The proceeds will be used in accordance with the company’s Green Financing Framework, which has received an “Excellent” Second-Party Opinion from Sustainable Fitch. The notes are expected to be listed on Euronext Dublin.
Key Overview
- Total issuance: SEK 1.5 billion
- Fixed-rate notes: SEK 750 million
- Fixed-rate maturity: 2 years
- Fixed-rate coupon: 3.268%
- Floating-rate notes: SEK 750 million
- Floating-rate maturity: 3.5 years
- Floating-rate coupon: 3-month STIBOR + 87 basis points
- Green framework: Heimstaden Bostad Green Financing Framework
- Framework assessment: “Excellent” Second-Party Opinion from Sustainable Fitch
- Planned listing: Euronext Dublin
- Joint bookrunners: Danske Bank, Nordea, SEB and Swedbank
- Property portfolio: More than 156,000 homes across nine countries
Heimstaden Bostad Prices SEK 1.5 Billion in Green Bonds
Heimstaden Bostad AB (publ) has successfully priced SEK 1,500 million green senior unsecured fixed rate (FXD) and floating rate (FRN) notes, providing the European residential real estate company with additional green financing.
The transaction consists of two equal-sized tranches. The first is a SEK 750 million in fixed-rate note with a maturity of two years and a coupon of 3.268%. The second is a SEK 750 million in floating rate note with a maturity of 3.5 years and a coupon of three-month STIBOR plus 87 basis points.
The issuance provides Heimstaden Bostad with funding through both fixed-rate and floating-rate debt instruments while maintaining its focus on financing under its green framework.
Green Financing Framework Supports Issuance
The proceeds from the SEK 1.5 billion green bonds will be used in accordance with Heimstaden Bostad’s Green Financing Framework.
The framework outlines the criteria that Heimstaden Bostad applies when issuing green bonds. It provides the basis for determining how proceeds from eligible green financing can be allocated.
The framework has been reviewed by Sustainable Fitch, which has provided an “Excellent” Second-Party Opinion.
The assessment provides an external review of the framework and its approach to green bond issuance. For Heimstaden Bostad, the framework allows the company to continue using green financing as part of its broader funding strategy.
The latest transaction therefore represents another step in the company’s use of green bonds to access capital while linking the financing to its established green financing criteria.
Two Green Bond Tranches Provide Different Financing Structures
The two notes have different maturities and interest structures.
The SEK 750 million FXD notes carry a fixed coupon of 3.268% and mature after two years. The fixed-rate structure provides a predetermined coupon over the maturity period.
The SEK 750 million FRN notes, meanwhile, mature after 3.5 years and carry a floating coupon based on three-month STIBOR plus 87 basis points.
Together, the two tranches give Heimstaden Bostad a combination of fixed-rate and floating-rate senior unsecured financing.
The company has not provided further details in the announcement on the individual green projects or assets that will receive proceeds from the latest issuance. The allocation will instead follow the criteria established under the Green Financing Framework.
Notes Expected to List on Euronext Dublin
Heimstaden Bostad plans to apply for the notes to be listed on Euronext Dublin.
The company said the final terms, once published, will be made available through Euronext Dublin as well as on the Heimstaden Bostad website.
Danske Bank, Nordea, SEB, and Swedbank acted as joint bookrunners for the transaction.
The planned listing will provide a public market venue for the notes and forms part of the process accompanying the green bond issuance.
Heimstaden Bostad Has Large European Residential Portfolio
Heimstaden Bostad is a leading European residential real estate company with more than 156,000 homes across nine countries.
The company has a property value of approximately SEK 331 billion and acquires, develops and manages properties with an evergreen perspective.
Its operations are supported by approximately 1,600 colleagues, while the company says its Scandinavian heritage and values are reflected in its approach to managing its residential portfolio.
The size of the portfolio means access to different forms of financing remains important to the company’s activities. Green bonds provide one financing channel that links capital raising with the company’s Green Financing Framework.
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Green Financing Remains Important to Real Estate
Green financing has become an increasingly important funding mechanism for real estate companies seeking to connect debt financing with environmental objectives.
For residential property owners, green financing frameworks can establish criteria for determining which investments and assets qualify for green bond proceeds.
In Heimstaden Bostad’s case, the Green Financing Framework provides the structure for its green bond issuance, while the Sustainable Fitch Second-Party Opinion provides an external assessment of the framework.
The latest SEK 1.5 billion issuance consequently adds to the company’s available financing while maintaining the green classification of the notes.
Fixed and Floating Financing Add Flexibility
The structure of the transaction also gives Heimstaden Bostad access to two different interest-rate structures.
The fixed-rate tranche has a two-year maturity and a 3.268% coupon, while the floating-rate tranche has a 3.5-year maturity and a coupon linked to three-month STIBOR.
The different maturities mean that the two tranches do not mature at exactly the same time. The company therefore receives financing across different time periods rather than concentrating the entire SEK 1.5 billion issuance at one maturity.
Both instruments are senior unsecured notes.
Outlook
The SEK 1.5 billion transaction strengthens Heimstaden Bostad’s access to green bond financing through two senior unsecured tranches with different maturities and interest structures.
The company will allocate the proceeds according to its Green Financing Framework, which has received an “Excellent” Second-Party Opinion from Sustainable Fitch. The planned Euronext Dublin listing will further support the tradability and visibility of the notes.
As Heimstaden Bostad continues to manage its large European residential property portfolio, the latest issuance demonstrates the company’s continued use of green financing as part of its funding strategy.
FAQs
1. How much did Heimstaden Bostad raise through its green bonds?
Heimstaden Bostad successfully priced SEK 1.5 billion in green senior unsecured notes.
2. What are the terms of the Heimstaden Bostad green bonds?
The issuance includes SEK 750 million in fixed-rate notes with a two-year maturity and a 3.268% coupon, and SEK 750 million in floating-rate notes with a 3.5-year maturity and a coupon of three-month STIBOR plus 87 basis points.
3. How will the proceeds from the green bonds be used?
The proceeds will be used in accordance with Heimstaden Bostad’s Green Financing Framework, which establishes the criteria for its green bond issuances.
4. Where will the Heimstaden Bostad green bonds be listed?
Heimstaden Bostad will apply for the notes to be listed on Euronext Dublin. The final terms will be made available on Euronext Dublin and the company’s website once published.
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