Whey Finance

Arla green bonds are snapping up

Arla has set a climate target for reducing CO emissions2E emissions by 30% in 2030 and aims to become net zero carbon by 2050.

Now, investors are supporting the transition by buying green bonds issued by Arla. The proceeds of SEK 1.5 billion ($ 180 million) from the green bonds will be allocated to green investments within the cooperative.

“Green bonds support our green thinking and are one more step towards a zero carbon future. As one of the largest dairy companies in the world, we owe it to consumers and the climate to take responsibility and play our part. As a cooperative, we are working hard to reduce greenhouse gas emissions across the entire value chain – from farm to fork – and take all possible steps towards a green future ”,said Arla Torben CFO Dahl Nyholm.

He added that the decision to issue green bonds is an integral part of Arla’s funding strategy.

Arla issued a floating rate green bond in the Swedish Krona bond market on May 7, 2021, with a 0.68% line of credit.

“Sweden has a large corporate bond market which, combined with the fact that Arla is a household name in Sweden, makes it very attractive for Arla to use this market,”said Nyholm.

With asset managers, banks as well as insurance and pension funds in the Nordic countries as the main investors, the bonds were immediately overbooked, with banks receiving offers for more than SEK 4 billion ($ 481 million). ) before the closing of the issue in the announced amount of SEK 1.5 billion.

The EMTN (Euro Medium Term Note) bond program with a maximum value of € 750m ($ 910m) is listed on the Irish stock exchange Euronext Dublin where the bonds are also listed.

Proceeds from the issuance will be used in accordance with Arla’s Sustainable Funding Framework, which is supported by a second part notice from Sustainalytics. Efficient use of biogas, water treatment and recycling, energy optimization at Arla’s 60 production sites as well as climate controls on farms are examples of how revenues are allocated.