Iceland's government issued a green bond valued at 750 million euros, or 111 billion ISK. The bond has a fixed 3.5% interest rate, a reoffer yield of 3,636%, and a maturity period of 10 years. The bonds are issued under Iceland's Sustainable Financing Framework.
There was significant interest from investors, with demand reaching 7 billion euros, which is more than nine times the size of the issue. The investor group includes central banks, official institutions, bank treasuries, insurance companies, and other institutional investors, mainly from Northern Europe. The joint lead managers for the issue were JP Morgan, BNP Paribas, DZ bank, and Nomura.
“We are particularly pleased to see the trust in our first green bond issue from a wide group of international investors. It demonstrates confidence in Iceland's fiscal and environmental policies, which reflect the international commitments we have made. This strong interest also shows investors' faith in Iceland and its reputation for sound environmental policy,” said Minister of Finance and Economic Affairs, Thordis Kolbrun Reykfjord Gylfadottir.
The investor group consisted of approximately 280 investors. This is the largest number of investors to ever participate in a Republic of Iceland transaction, and an unprecedented eight times oversubscription level.
“This bond issuance aligns with our government's debt strategy and is part of our climate action plan. The proceeds from the issue will be used to fund the government's expenses related to environmental issues in the coming years. This funding will better equip us to address future challenges. The strong demand and favorable terms also indicate investors' confidence in Iceland's economic and fiscal policies,” said Thordis Kolbrun Reykfjord Gylfadottir.
