Orkuveita Reykjavikur to auction more 36-year green bonds Wednesday

By Angela McDaniels

Tacoma, Wash., June 6 – Orkuveita Reykjavikur will sell additional 36-year inflation-linked green bonds through an auction on Wednesday, according to a company news release.

Previously, ISK 5.64 billion of bonds have been issued in the series.

The bonds pay a fixed real interest rate and will be listed on the Nasdaq Iceland Sustainable Bond market.

The series has a semiannual annuity amortization schedule and a final maturity on Feb. 18, 2055.

Fossar Markets is managing the auction process.

The auction will be structured as a single-price auction, which means that all accepted bids will be sold to investors at the same price where the lowest accepted price (highest yield) will determine the selling price.

The company reserves the right to accept all of the submitted bids, accept part of them or reject all of them. The total amount of accepted bids will be announced after the auction.

Proceeds will be used to finance green projects within Orkuveita Reykjavikur and subsidiaries Veitur Utilities and ON Power. These include projects such as renewable energy, energy distribution and expansion of the district heating system; sustainable water and wastewater management; technologies that support smart grid applications; and carbon capture projects.

Orkuveita Reykjavikur said it has established a green bond framework that conforms to the green bond principles guidelines put forward by the International Capital Market Association. The framework is based on four pillars; use of proceeds, process for project evaluation and selection, management of proceeds and reporting.

According to the news release, the Center for International Climate Research has issued an independent review of the framework and has rated it with the highest possible rating of “dark green” for positive environmental effects of the projects and a rating of “excellent” for the governance structure of the framework.

The energy and utility company is based in Reykjavik, Iceland.

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