Grunnstoð, a subsidiary of Reykjavík University (RU), has completed the refinancing of the University’s premises on Menntavegur 1 with the sale of new social bonds in the amount of ISK 12bn. The bonds are indexed, with a 40-year maturity, and bear 2.25% fixed interest. Demand was strong, and the investor group included Icelandic pension funds, mutual funds, and institutional investors. An application for listing on the Nasdaq Iceland Main Market is planned.
The bonds fall within RU's new social financing framework, which is certified by S&P Global Ratings. The social financing framework includes issuance of bonds and other financial instruments linked to social objectives. In RU’s case, the framework is aligned with the UN Sustainable Development Goals. Funds acquired in this way are used to finance assets and projects that have a positive social impact – in this case, university education. Further information on the social financing framework can be found on the RU website (Icelandic).
RU president Ragnhildur Helgadóttir says that because real estate financing is a large item in the University’s operations, it is important to obtain financing on favourable terms. “This financing is the result of extensive, effective work by a large number of dedicated people, both employees and others, and we are extremely satisfied with the result.”
The issuer of the bonds is a specialised fund operated by Iceland Funds. Íslandsbanki oversaw the sale of the bonds and their admission to trading on the Nasdaq Iceland exchange.