ANNEX TO THE FINAL TERMS
NOTES BEING ISSUED AS GREEN BONDS
Reasons for the offer
The proceeds of the Notes will be used by the Issuer to finance certain climate and environmental projects and assets pursuant to the City of Malmö’s Green Bond Framework established in November 2017 (the "Green Bond Framework"). The Notes are being issued as green bonds ("Green Bonds"), being notes which are in alignment with the guidelines set out in the International Capital Markets Association's Green Bond Principles 2017 (the "Green Bond Principles").
Green Bond Framework
The Green Bond Framework, amongst other things, sets out how Eligible Assets and Projects are evaluated and selected and how the City of Malmö will manage, and report on, the proceeds of its Green Bonds. Information regarding the Green Bond Framework is available on the website of the Issuer: www.malmo.se/gronaobligationer
Following the recommendation of the Green Bond Principles, the City of Malmö has engaged Sustainalytics N.V. ("Sustainalytics") (an independent global responsible investment research firm specialising in environmental, social and governance research) to issue a second-party opinion (the "Sustainalytics Opinion") regarding the suitability of the Green Bonds as an investment in connection with certain environmental and sustainability criteria.
Until the proceeds of its Green Bonds are fully allocated, the City of Malmö intends to report annually on, amongst other things, how it utilises such proceeds.
The Green Bond Framework, the Sustainalytics Opinion and any reports prepared by the City of Malmö (as described in the preceding sentence) may be obtained by prospective investors from the website of the City of Malmö specified above. Neither the Green Bond Framework, the Sustainalytics Opinion nor any reports (as described above) are incorporated into, or form part of, either these Final Terms or the Offering Memorandum.
Neither the City of Malmö nor the Lead Manager makes any representation as to the suitability of the Green Bonds to fulfil environmental and sustainability criteria required by prospective investors. Each potential purchaser of the Notes should determine for itself the relevance of the information contained or referred to in these Final Terms regarding the use of proceeds and its purchase of Notes should be based upon such investigation as it deems necessary.
The City of Malmö has agreed and committed itself in the Green Bond Framework to certain management of proceeds and reporting obligations. However, it will not be an event of default under the terms and conditions of any Green Bonds if it fails to comply with such obligations. Each environmentally focused potential purchaser of the Notes should be aware that Eligible Projects may not deliver the sustainability benefits anticipated.
Considerations for potential investors seeking exposure to green assets:
The Notes are issued as Green Bonds, but there can be no assurance that such use of proceeds will be suitable for the investment criteria of an investor.
The Issuer’s intention is to apply the proceeds from the offering of Notes specifically for projects and assets that promote climate-friendly and other environmental purposes (either in those words or otherwise) ("Green Projects"). Potential investors should have regard to the information set out in the Issuer's Green Bond Framework regarding such use of proceeds and must determine for themselves the relevance of such information for the purpose of any investment in such Notes together with any other - 2 - investigation such investor(s) deems necessary. In particular no assurance is given by the Issuer that the use of such proceeds for any Green Projects will satisfy, whether in whole or in part, any present or future investor expectations or requirements as regards any investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future applicable law or regulations or by its own by-laws or other governing rules or investment portfolio mandates, (in particular with regard to any direct or indirect environmental, sustainability or social impact of any projects, assets or uses, the subject of or related to, any Green Projects). Furthermore, it should be noted that there is currently no clearly defined definition (legal, regulatory or otherwise) of, nor market consensus as to what constitutes, a “green” or an equivalently-labelled project or as to what precise attributes are required for a particular project to be defined as “green” or such other equivalent label nor can any assurance be given that such a clear definition or consensus will develop over time. Accordingly, no assurance is or can be given to potential investors that any projects, asset or uses the subject of, or related to, any Green Projects will meet any or all investor expectations regarding such “green” or other equivalently-labelled performance objectives or that any adverse environmental, social and/or other impacts will not occur during the implementation of any projects, assets or uses the subject of, or related to, any Green Projects.
No assurance or representation is given as to the suitability or reliability for any purpose whatsoever of any opinion or certification of any third party (whether or not solicited by the Issuer) which may be made available in connection with the issue of any Notes, such as the Second Opinion on the Green Bond Framework by Sustainalytics N.V. dated 10 November 2017, and in particular with any Green Projects to fulfil any environmental, sustainability, social and/or other criteria. For the avoidance of doubt, any such opinion or certification is not, nor shall be deemed to be, incorporated in and/or form part of the Offering Memorandum or Final Terms. Any such opinion or certification is not, nor should be deemed to be, a recommendation by the Issuer or any other person to buy, sell or hold any such Notes. Any such opinion or certification is only current as of the date that opinion was initially issued. Potential investors must determine for themselves the relevance of any such opinion or certification and/or the information contained therein and/or the provider of such opinion or certification for the purpose of any investment in such Notes. Currently, the providers of such opinions and certifications are not subject to any specific regulatory or other regime or oversight.
In the event that these Notes are listed or admitted to trading on any dedicated “green”, “environmental”, “sustainable” or other equivalently-labelled segment of any stock exchange or securities market (whether or not regulated), no representation or assurance is given by the Issuer or any other person that such listing or admission satisfies, whether in whole or in part, any present or future investor expectations or requirements as regards any investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future applicable law or regulations or by its own by-laws or other governing rules or investment portfolio mandates, in particular with regard to any direct or indirect environmental, sustainability or social impact of any projects, assets or uses, the subject of or related to, any Green Projects. Furthermore, it should be noted that the criteria for any such listings or admission to trading may vary from one stock exchange or securities market to another. Nor is any representation or assurance given or made by the Issuer or any other person that any such listing or admission to trading will be obtained in respect of any such Notes or, if obtained, that any such listing or admission to trading will be maintained during the life of the Notes.
While it is the intention of the Issuer to apply the proceeds of the Notes for Green Projects in, or substantially in, the manner described in the Green Bond Framework, there can be no assurance that the relevant project(s), asset(s) or use(s) the subject of, or related to, any Green Projects will be capable of being implemented in or substantially in such manner and/or accordance with any timing schedule and that accordingly such proceeds will be totally disbursed for such Green Projects. Nor can there be any assurance that such Green Projects will be completed within any specified period or at all or with the results or outcome (whether or not related to the environment) as originally expected or anticipated by the Issuer.
Any such event or failure by the Issuer will not constitute an Event of Default under the Notes. Any such event or failure to apply the proceeds of any issue of Notes for any Green Projects as aforesaid and/or withdrawal of any such opinion or certification or any such opinion or certification attesting that the Issuer is not complying in whole or in part with any matters for which such opinion or certification is opining or certifying on and/or any such Notes no longer being listed or admitted to trading on any stock exchange or securities market as aforesaid may have a material adverse effect on the value of such Notes and also potentially the value of any other Notes which are intended to finance Green Projects and/or result in adverse consequences for certain investors with portfolio mandates to invest in securities to be used for a particular purpose.