“This is not your traditional Norwegian bond. In this new format, sustainability shares the spotlight with credit. A tribute to the credit, the environmental goal and strong capital markets, the issue was well-received. The first of its kind, sustainability-link had a clear positive impact on investors’ interest and demand.”
Editor George Weltman, Marine Money
The first but certainly not the last
The significant interest – the book was more than two times covered – is said to reverse a negative trend with some investors scaling back their shipping exposure due to among other reasons ESG risk.
“The bond put us at the center stage of sustainable financing and kicked off a great ESG year for Odfjell in 2021. Great to hear that the transaction itself has won recognition from the international financing community. It adds significant weight to our ESG commitment, and both framework and bond have become recognized benchmarks within the bond market. Thanks again to everyone internally that contributed to realizing this transaction.”
Gustav Sannem, VP Finance
2021 was a record year in the Nordic high yield bond market with more than NOK 115bn raised through primary issues across sectors. Odfjell raised NOK 850m through the sustainability-linked bond in January 2021, and NOK 275m from a separate tap issue and conditional buyback of bonds in November 2021. The award is shared with joint lead managers and sustainability structuring advisors, DNB Markets, Nordea and SEB.
The bond’s redemption price will increase by 1.5% if Odfjell fails to reach the set AER target, to be measured in June 2024.
“Will 1.5% make a difference? Odfjell believes so, as it is the right thing to do. Did someone suggest a moral imperative? In case you were wondering, the company was within its AER trajectory as of year-end 2021,” Welman concludes.
Recognizing exceptional transactions
“Marine Money’s Deal of the Year awards recognize the global bankers, financial advisors and legal teams who execute transactions that we believe are exceptional. Our criteria for selection include value creation for stakeholders, creativity, overcoming execution challenges and innovation,” said Matt McCleery, President of Marine Money.
“The deals documented in these pages are about people - a community of hardworking and thoughtful professionals working hard to serve an important industry that carries 90% of world trade.”
Editor George Weltman added: “From groundbreaking sustainability linked loans to transformative acquisitions to creative business combinations to wildly successful capital markets offerings, we had an amazing slate of nominated transactions to consider.”
Odfjell was also recognized with the Norwegian Bond Award in 2016. To read the editorial coverage of the 2021 award, click here.