The City of Gothenburg

  • The City of Gothenburg was the first city in the world to issue Green Bonds.
  • The City is now a frequent issuer with 5 issues currently outstanding for a total of 3.36 billion SEK.
  • Transparency is achieved through regular investor letters

Transaction highlights

On 23 June 2015, SEB acted as Sole Bookrunner when City of Gothenburg (the City) returned to the Green Bond market with a 6 year 1.455% SEK 1,050m Green Bond.City of Gothenburg has become a well-known Green Bond issuer and this transaction marks the City’s third Green Bond, with SEB trusted to act as Sole Bookrunner on all three transactions.

City of Gothenburg established its Green Bond framework in conjunction with its debut Green Bond issue in September 2013. To provide validity, the City also decided to have their framework vetted by the academic, and independent, third party specialist CICERO The City’s main environmental priorities, including reduction of the carbon footprint, expansion of the platform for sustainable travelling/commuting and increased biodiversity/resource efficiency, rimes well with the Green Bond concept.

Given City of Gothenburg’s frequent appearance in the bond market and already having issued two Green Bonds, investors were deemed to be up to date with the credit and its environmental objectives, hence there was no need for additional marketing.

On Tuesday 23 June at 09.30 CET, following a go/no-go call, the transaction was announced as a fixed 6 year SEK 1,000m Green Bond, and the initial guidance was communicated as MS+46-49bps. The orderbook was off to a strong start, with several large orders from dedicated Green Bond investors, and one hour into the bookbuilding the orderbook exceeded SEK 2bn.

Supported by an exceptionally strong orderbook, allowed City of Gothenburg to tighten the final spread to MS +45bps, which was c. 2bps inside the AAA Covered Bond benchmark curve. To accommodate the high demand and to smoothen the allocation process, the final size was set at SEK 1,050m, which was slightly above the initial target.

The final orderbook comprised 30 orders, including several foreign accounts, and a majority came from dedicated Green Bond investors.The transaction was priced at a coupon of 1.455%, which constitutes the City’s lowest fixed coupon ever achieved in the SEK market.

This transaction truly marks a success as it attracted an extraordinary demand which demonstrates investors’ appreciation of the City of Gothenburg credit and its environmental efforts.