Telia issues green hybrid bond to fund energy efficient networks

Telia Company has issued a green hybrid bond of EUR 500 million – aiming to use the finance for more energy efficient networks.
Telia network offers
Telia Company said it has identified four investment categories eligible as green: energy efficiency, green digital solutions, renewable energy and green buildings. It will use the proceeds for new projects and for existing projects no older than two years.

Examples of green telecom projects include network transformation from copper to fiber optic cables in Sweden, and green digital solutions for customers.

“Our industry has a key role to play in tackling climate change and therefore it makes sense for us cater to the strong market demand for green investments. We will use the proceeds from this green bond for investment needs associated with our environmental ambitions,” says Agneta Wallmark, head of Group Treasury at Telia Company.

In 2019, Telia Company set the Daring Goals to reach zero CO2 throughout the value chain and zero waste in its own and networks operations by 2030. In January, Telia Company set more detailed environmental goals to be reached by 2022. These goals include climate neutrality within its own operations, only use renewable electricity, and increase energy efficiency.

Telia Company will report the environmental impact of the projects financed by the green bond in its Annual and Sustainability Report, as well as progress related to the Company’s environmental goals.

The rationale for issuing additional hybrid capital is to further decrease leverage and prove the commitment to the company’s rating target of A- to BBB+. The first three tranches of hybrid capital were issued in March 2017 and introduced a subordinated capital layer.

The new hybrid bond has a maturity of 61.25 years with the first reset date after 6.25 years. The coupon is 1.375 percent and the re-offer yield has been set at 1.50 percent.

The Joint Bookrunners mandated by Telia Company for this transaction were BofA Securities, Citigroup, Nordea and SEB.