Norway’s Odfjell places shipping’s 1st sustainability-linked bond

As the first in the international shipping industry, Norway’s Odfjell SE has successfully issued a sustainability-linked bond (SLB).

As informed, the sustainability-linked bond marks a first not only for Odfjell and the international shipping industry but also for the Nordic region across all industries. 

In line with the shipping and tank terminal company’s long-term climate targets, the bond marks another milestone in Odfjell’s work to reduce the environmental impact of shipping. 

DNB Markets, Nordea and SEB acted as joint lead managers and sustainability structuring advisors in the transaction. Upon closing, the unsecured bond issue was substantially oversubscribed and driven by a high-quality and ESG focused orderbook.

The issue size was set to NOK 850 million (about $100 million) with a maturity date in January 2025. Proceeds from the bond issue will be used to refinance existing bonds and for general corporate purposes, according to Odfjell.

The bond is intended to be listed on Oslo Børs and Euronext ESG Bonds.

Specifically, the bond issue is the first to be issued under a newly established sustainability-linked finance framework and is linked to Odfjell’s fleet transition plan and ambition to reduce the carbon intensity of its controlled fleet by 50% by 2030 compared to 2008 level. 

“With this sustainability-linked bond, we prove our strong commitment to reduce emissions and build a more sustainable shipping industry,” Kristian Mørch, CEO of Odfjell, pointed out.

“Odfjell has for many years worked actively to drive change and reduce our carbon footprint, and we are now pleased to see that investors and banks support us through this sustainability-linked bond.”

“The shipping industry plays a vital role in the green transition… By linking their CO2 emission reduction target with their bond financing terms, they (Odfjell) further bolster their commitments and inspire other peers to follow. We are … grateful for being selected as facilitators of this hallmark transaction and supporting Odfjell on their sustainability pathway,” the Joint Lead Managers at DNB, Nordea and SEB, said.

Odfjell SE recently launched climate goals that go beyond IMO’s targets. Since 2008, the company has run several improvement and efficiency programs, resulting in an almost 30% reduction in carbon intensity. The new climate targets are a part of the company’s strategy on environmental, social and governance elements of the business.