Denmark recently announced the issuance of 7.75 billion Danish kroner ($1.10 billion) in new green bonds with a maturity date of November 2033. In a syndicated transaction on Tuesday, the country successfully attracted DKK16.7 billion in demand, as confirmed by one of the joint lead managers involved.
While the final demand slightly fell short of the DKK18.4 billion initially indicated during the book-building process, the spread between the green bond and its conventional twin has been noted at minus 1.5 basis points. This implies a 1.5 basis-point green premium, meaning that investors are willing to accept a yield that is 1.5 basis points lower than that of the conventional twin.
Denmark follows the "twin bond" concept, similar to the one used by the German Finance Agency for green bond issuance. In this case, the green and conventional twins share the same coupon and maturity. It's important to note that this is only Denmark's second green government bond.
The lead managers responsible for overseeing this transaction included Danske Bank, J.P.Morgan, Nordea, and SEB.