NORWAY Trends and Developments Contributed by: Ida Marie Windrup, Markus Nilssen and Daniel Jovanovic, BAHR
BAHR Tjuvholmen allé 16 0252 Oslo Norway Tel: +47 21 00 00 50 Email: post@bahr.no Web: www.bahr.no
Investing in Norway: Human Rights, ESG, the Bond Market, Direct Lending and Securitisation General market observations Throughout 2024 and continuing into 2025, Norway’s banking and debt capital markets have demonstrated remarkable stability and resilience, navigating a com- plex macroeconomic landscape with considerable skill. The anticipated interest rate reductions from Norges Bank, which market participants had expect- ed throughout much of 2024, failed to materialise until early 2025, primarily due to persistently robust employment conditions and notable currency depre- ciation pressures that kept inflationary concerns ele- vated. However, the eventual stabilisation of interest rates, combined with declining inflationary pressures observed in the latter part of 2024 and early 2025, has created a significantly more favourable environment for financing operations across multiple sectors. The Norwegian banking sector has maintained its traditional strength and conservative approach whilst adapting to evolving market conditions. Bank lending activities have remained notably dynamic, with institu- tions demonstrating flexibility in their approach to dif- ferent sectors and borrower profiles. However, certain sectors continue to encounter significant difficulties in accessing traditional bank financing, reflecting both regulatory pressures and evolving institutional poli- cies regarding environmental, social and governance (ESG) considerations. With notable exceptions amongst Norway’s and Northern Europe’s most prominent financial institu- tions, several banks – including some institutions that had previously been market leaders within specific segments – now maintain an increasingly cautious
approach towards financing carbon-intensive indus- tries, particularly petroleum and gas operations. This shift reflects not only regulatory guidance but also internal policy changes driven by stakeholder pres- sure and long-term strategic considerations regard- ing climate risk and reputational factors. Companies within the real estate sector, and in particular com- mercial property companies, have also struggled with obtaining bank financing on attractive terms (or at all), forcing them to turn to the Norwegian corporate bond market. In contrast, the shipping sector has performed excep- tionally well throughout this period, benefiting from strong fundamentals and supportive market condi- tions. Many deals have been completed successfully, and there remains ongoing bank support for operators that require financing, reflecting the sector’s strategic importance to Norway’s economy and its relatively strong performance metrics during recent challeng- ing periods. Investment opportunities in Norway have increased substantially due to the weakening Norwegian krone, which has created attractive entry points for inter- national investors. The currency depreciation, whilst presenting challenges for some domestic operators, has generated continued and heightened interest from foreign investors and companies in both private and public merger and acquisition transactions, especially where the exchange rate differential creates compel- ling pricing opportunities. The aquaculture and tech- nology sectors remain particularly strong examples of this trend, with multiple high-profile transactions completed or in progress.
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