Investor Presentation Green Bond

Transcription

1 Investor Presentation Green Bond

2 SEK s mission and vision SEK s mission is to ensure access to sustainable financial solutions for the Swedish export industry on commercial terms. SEK s vision is to strengthen the competitiveness of Swedish exporters and help create employment and sustainable growth in Sweden. SEK is 100% owned by the Swedish government. 2

3 Economy of Sweden Public debt to GDP Facts Rating: AAA/Aaa/Aaa GDP growth Q (qoq/yoy): 1.0% /3.0% GDP growth % GDP (2014): USD bn* GDP per capita: USD * 5 year CDS spreads Unemployment (July 2015): 7.4%** CPI/CPIF*** yoy (July 2015): -0.1%/0.9% Current Repo Rate: -0.35% *USD/SEK average 2014, ** seasonal adjusted, % of labour force *** CPIF = CPI with fixed mortgage rates 3 Source: SCB, IMF, Macrobond

4 Swedish exports large part of GDP and well diversified Exports and imports Key export goods Machinery, 16% Auto, 15% Consumer goods, 13% IT & telecom, 11% Pulp & paper, 11% Materials, 10% Energy, 9% Construction, 8% Health care, 7% 4 Source: SCB, Macrobond

5 5 Well-known exporters

6 The Swedish export credit system Exporter concludes the export contract Bank arranges the export credit The Swedish Export Credits Guarantee Board (EKN) insures risks SEK provides financing 6

7 Ratings AA+ (stable) The ratings on SEK reflect our opinion that there is an extremely high likelihood of extraordinary support for the company from Sweden (AAA/Stable/A-1+). Its capital and earnings position is very strong in our opinion. SEK is an important pillar for the success of Swedish exporters. October 2, 2014 Aa1 (stable) We view the probability of support as high in light of SEK s strategic public role and its 100% ownership by the Kingdom of Sweden, which reinforces the expectation of support in a distress scenario. The owner s support was clearly demonstrated through a direct capital injection and the creation of dedicated borrowing facilities to allow SEK to continue to fulfil its essential public policy role in March 24,

8 Funding and liquidity: No refinancing risk USD bn Loan facility with the Swedish National Debt Office Borrowing total, including shareholder's funds Lending with first possible pre-payment, including the CIRR-system As of June 30, 2015

9 Credit portfolio Demand for financing from the Swedish export industry increased dramatically during the financial crisis The Swedish government heavily increased SEK s lending capacity during the financial crisis SEK secured access to financing for the Swedish exporters USD bn New credits accepted USD bn Gross exposure Net exposure 9 As of June 30, 2015

10 Counterparty exposures & risk mitigation 70% Export credit agency guarantees Bank guarantees Credit derivatives Collateral agreements Insurance company guarantees 60% 50% 40% 30% 20% 10% Gross exposure Net exposure 0% Corporates Financial institutions incl. ABS and covered bonds Sovereigns (incl. local governments) 10 As of June 30, 2015

11 Liquidity portfolio Investment profile Average duration of new investments: 8 months Maximum maturity: 18 months Minimum Rating: A 100% Maturing profile of SEK s liquidity portfolio 90% 80% 70% 60% 50% 30 Jun Dec % 30% 20% 10% 0% M 1 year 1 year < M 3 years M > 3 years 11 As of June 30, 2015

12 Funding: flexible and diversified New funding by region 2014 (2013) Multiple funding programmes in all major currencies Funding in local currencies Responsive to investor needs An experienced benchmark issuer Japan 37% (18%) North America 26% (29%) Europe excl. Nordic countries 21% (35%) Non-Japan Asia 9% (11%) Nordic countries 3% (3%) Latin America 3% (0%) Oceania 1% (0%) Middle East/Africa 0% (4%) New funding by structure 2014 (2013) Risk management policy: No currency risk Very limited interest rate risk All structured notes are hedged Plain Vanilla 55% (69%) Equity linked 22% (14%) FX linked 15% (3%) Commodity linked 3% (3%) PRDC 3% (1%) IR linked 2% (10%) 12 As of December 31, 2014

13 Most impressive sovereign, supranational or agency borrower 2013 Most impressive sovereign, supranational or agency borrower 2014 Most impressive MTN borrower 2013 Global Issuer of the Year Landmark Deal JPY31bn ETF-Linked Note Most impressive MTN borrower

14 About SEK Owner: Swedish government, 100% Mission: Primary task: To ensure access to financial solutions for the Swedish export industry on commercial terms Financing of export credits Credit rating: S&P: AA+ /Stable/A-1+ Moody s: Aa1/Stable/P-1 Established: 1962 Financial information at June 30, 2015 Total assets USD 36.6bn Lending USD 27.7bn Common Equity Tier 1 capital ratio 20.7% After-tax return on equity 6.7% 14

15 SEK and Sustainable Financing Comply with Environmental and Social International Standards Anti-corruption Environment Labor conditions Human rights Channel capital to a low carbon economy Swedish strategy for clean technology ECO-innovation 15

16 Swedish Clean Technology Waste to energy Water and biogas Sustainable city planning Renewables Urban transportation Smart grids Sustainable growth in Sweden (base year 1990) In the last 15 years Sweden has cut CO 2 emissions by 9 percent while still enjoying economic growth of 44 percent. GDP (+58%) CO2 (-21%) Source: SCB, Swedish Environmental Protection Agency 16

17 SEK Cleantech Partnerships The Swedish Clean Technology Export Group (consisting of 15 agencies and state owned companies) ECO-Innovation Agreement with Bank of China 17

18 SEK Green Bond Framework Green Bond Principles compliant Second opinion by CICERO Eligible Projects CO 2 reduction measured on an aggregated level Audited Allocation of Proceeds Homepage and Annual newsletter 18

19 SEK Green Bond Framework Second opinion SEK bases its management of green projects on broad and well established guidelines like IFC s Performance Standards on Environmental and Social Sustainability, IFC s Environmental, Health and Safety General Guidelines and OECD s Common Approach to environmental and social risks of projects. Furthermore, SEK employs the International Financial Institution Framework for Harmonised Approach to Greenhouse Gas Accounting for their CO2 impact assessment. Finally, SEK will establish a dedicated website which will allow for transparent reporting on all important aspects of the green bond program. Overall, we therefore find that SEK s green bond framework has a very high probability of securing projects that support a low carbon and climate friendly future. 19

20 SEK Green Bond Framework Eligible Projects No fossil fuel projects are eligible The Eligible Projects are selected through the best of SEK s capabilities, and are selected in two phases: 1. SEK Client Relationship Management team identifies and proposes a possible Eligible Project. 2. SEK Sustainability Department assesses as to whether a project qualifies as an Eligible Project. Final decision will rest with SEK Sustainability Department. 20

21 SEK Green Lending Eligible Projects Facility amount approximately USD 970 million as of August Outstanding amount (disbursements minus amortizations). Total annual CO 2 reduction on facility amount 4,443,000 tons. Eligible Projects, per category 8% Sustainable transport Renewable energy 92% 21

22 SEK Green Bond Framework GHG accounting CO 2 emission reductions will be measured on a project basis in proportion to the part financed by SEK. The methodology to measure these reductions follows the methodology set out in International Financial Institution Framework for Harmonised Approach to Greenhouse Gas Accounting November SEK Sustainability department will estimate the reasonableness of reported reductions. 22

23 SEK Green Bond Framework Allocation of Proceeds Subaccount to absorb the Green Bond Proceeds. Balance will be adjusted on a semi-annual basis. An amount equal to the subaccount balance will be held in cash, Green Bonds or municipality and/or government risk with a minimum credit rating of AA-. Eligible Projects Disbursements Amortizations Subaccount Green Bond Proceeds The subaccount balance will be reviewed by external auditors on a semi-annual basis. 23

24 SEK Green Bond Framework Monitoring and reporting Impact reporting on Eligible Projects and links to relevant documents will be disclosed at An annual newsletter will be provided to inform of Eligible Projects, CO 2 emission reductions and a summary of the SEK Green Bond development. 24

25 25 Case

26 Contact Mats Axelman Director - Treasury/Funding Phone mats.axelman@sek.se 26