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Telia Company issues green hybrid bond of €500m

Telia office.jpg

Telia Company has issued a second green hybrid bond of €500 million with the proceeds set to finance more energy efficient networks.

The firm revealed that this will include the Swedish network transformation from copper to fibre and deployment of 5G, as well as digital solutions that will enable customers to reduce energy use and emissions.

The hybrid bond is issued as part of Telia’s refinancing of the upcoming call dates for outstanding hybrid bonds in October 2022 and April 2023.

“The volatility in the financial markets during the start of 2022 has been challenging hence we are very pleased to have taken the opportunity to refinance part of our coming hybrid calls and issue another green hybrid bond as part of our ambition to integrate sustainability also in our funding activities,” Agneta Wallmark, VP head of group treasury at Telia Company said.

That volatility has not been helped by global bond markets suffering “unprecedented losses” since last year’s peak.

The Bloomberg Global Aggregate Index has fallen 11% from January 2021 levels, resulting in the biggest decline from a peak in data since 1990.

Rising inflation across the world adds to the uncertainty, meaning the allure of holding debt, including government bonds is diminishing.

Nonetheless, Wallmark says the investments will increase energy efficiency and unlock the environmental benefits of digitalisation in various sectors, including through Telia’s own digital solutions that are enabling customers to reduce energy use and greenhouse gas emissions.

The bond has a maturity of 61.25 years with the first reset date after 6.25 years. It is expected to be rated two notches below Telia’s senior rating and will be treated as 50% equity and 50% debt.

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