Hydro secures green bond funding

Norsk Hydro ASA, a Norway-based aluminum producer with operations in the United States and throughout Europe, has issued 500 million euros ($515 million) worth of senior unsecured green bonds.

The company, which is among the world’s largest producers of recycled-content aluminum, says the bonds were issued as part of its Euro Medium Term Note (EMTN) program. The new bond has a tenor of seven years and a fixed annual coupon of 3.625 percent (3.649 percent reoffer yield).

“We are very satisfied to have completed such a successful placement and issued our inaugural green bond,” Hydro Chief Financial Officer Trond Olaf Christophersen says. “The strong interest confirms that Hydro is considered an attractive investment for bond investors. We are pleased to have achieved highly competitive terms.”

The proceeds from the bond issue will be allocated to eligible projects as defined in Hydro’s Green and Sustainability-Linked Financing Framework. Hydro says the funding will contribute to advancing its strategy of accelerating the green aluminum transition.

In the United States, at least two recycled-content electric arc furnace (EAF) steel mill operators have sought or received green or climate-related bond financing, including the Big River Steel subsidiary of U.S. Steel Corp. and Hybar, which is building an EAF mill in Arkansas.

Hydro's bonds will be listed on the Irish Stock Exchange, also known as Euronext Dublin, and Citi, Danske Bank, ING, J.P. Morgan and SEB are joint lead managers of the bond transaction.