Denmark to Launch Debut Green Bond in January, Will Apply 'Twin Bond' Method
By Emese Bartha
Denmark will launch its debut green bond at an auction on Jan.
19, applying the "twin bond" concept used by the German Finance
Agency, the Danish central bank said Wednesday.
The new green bond will have a 0% coupon and maturity in
November 2031, thus the coupon and the maturity of the green bond
will match those of a conventional on-the-run government bond.
The expected issuance volume of the green bond will be announced
in connection with the release of the central government's
borrowing strategy later in December, the central bank said. It
added that the issuance volume of green bonds is determined on the
basis of the amount of eligible green expenditures, which
constitutes an upper limit, while taking the overall borrowing
strategy into account.
"There is an increasing focus on sustainability and the green
transition, and this also applies to a growing group of investors
in the financial markets," Gov. Signe Krogstrup said. "With a green
bond, the Danish government offers a product that is in high demand
among investors and that can support a broad and well-diversified
investor base," she said.
The twin bond concept supports the liquidity in the green bond,
as investors, at any time, will have the opportunity to switch the
10-year green twin bond to the corresponding and more liquid
conventional 10-year twin bond one-to-one, the central bank said.
However, investors won't be able to switch the conventional twin
bond to the corresponding green twin bond, it said.
Write to Emese Bartha at firstname.lastname@example.org
(END) Dow Jones Newswires
December 08, 2021 03:07 ET (08:07 GMT)
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