Denmark launches first sovereign bond under EU green rules
Denmark is set to become the first country to sell a green bond under the European Union’s new standard, with investor bids already above 14 billion kroner and pricing indicated 1.5 basis points inside the conventional 2.25% November 2035 benchmark. The sale, sized between 5 and 10 billion kroner, is expected to price later today.
The EU Green Bond Standard (EUGBS), agreed in 2023 and available to issuers since late last year, is voluntary but billed by the bloc as a “gold standard.” It requires that proceeds are aligned with the EU’s taxonomy for environmentally sustainable activities. Denmark’s debut would mark the first sovereign to use the label after a string of early, EU‑compliant deals from corporates such as A2A, Iberdrola and ABN Amro, and public‑sector issuers like the Autonomous Community of Madrid and the European Investment Bank.
Proceeds from the new 10‑year notes will finance projects tied to renewable energy, sustainable transport, the conversion of agricultural land and nature restoration, according to the debt office. BNP Paribas, Danske Bank, Nordea and SEB are joint bookrunners. Analysts at Nordea flagged a minimum issuance of 5bn kroner and a maximum of 10bn kroner for the opening line.
The security is being sold as a twin to Denmark’s 2.25% 2035 conventional bond – a format the kingdom has used in prior green issues to support liquidity. The twin structure lets investors switch between the green and conventional notes, helping market‑making and price discovery. Research firm Anthropocene has observed a consistent 2–3 bps “greenium” on Denmark’s earlier twins, suggesting a small premium for the labelled paper versus its conventional peer.
The framework creates transparency and trust in the market – and the Danish state is leading the way by adhering to the highest standards,said Signe Krogstrup, deputy governor of Denmark’s central bank.
Some of the region’s largest sovereign borrowers, including Germany and the EU itself, have yet to issue under EUGBS, even as Europe remains the deepest market globally for labelled debt. Earlier this month, Denmark signalled it would target as much as 10bn kroner for the first EUGBS‑aligned sovereign, positioning the sale as a step toward a common European language for green investments.
The transaction comes as policymakers and investors seek tighter safeguards against greenwashing. For sovereigns and companies that opt in, the EUGBS label imposes standardised reporting and alignment with the EU taxonomy, making project selection and use‑of‑proceeds more comparable across issuers. Denmark’s twin will feed eligible spending in areas such as energy transition and biodiversity, with the debt office expected to publish allocation and impact updates after issuance.
Final terms, including the issue size within the 5–10bn kroner range and the spread versus the conventional twin, will be set upon pricing later today.
