Sustainable Finance Update: February 2022

A look at what’s been happening in the sustainable finance market in Australia and abroad.

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Selected Recent Deals

PAG Real Estate completes sustainability linked loan

  • As part of its firmwide commitment to incorporating ESG principles into its investment activities, PAG Real Estate has completed a syndicated sustainability linked loan for its PAG Real Estate Partners III Fund.
  • The loan is linked to targets aimed at improving the ESG performance of the portfolio assets. Targets include portfolio GRESB score, proportion of assets that are certified by suitable building or energy rating schemes and ESG-related training of PAG Real Estate staff.
  • NAB acted as Sustainability Coordinator, Agent and Lender.

Metlifecare closes NZ’s biggest sustainability linked loan

  • Retirement village provider, Metlifecare, has refinanced its bank loan facilities with a NZD1.25bn sustainability linked loan.
  • The loan is linked to three targets that include the establishment of a SBTi targets and annual reductions in greenhouse gas emissions, building new aged care communities with 6 Green Star rating from the New Zealand Green Building Council, and increasing the number of dementia care beds.
  • BNZ acted as Lender on the transaction.

L&Q Housing completes sustainability linked bond

  • L&Q Housing has completed a GBP300m 10-year sustainability linked bond, a first for the social housing sector.
  • The bond is linked to achieving three targets that include the reduction of scope 1 and 2 greenhouse gas emissions, achievement of a minimum average calculated Standard Assessment Procedure (SAP) score and building of 8,000 new homes of which 50% are affordable.
  • NAB acted as Joint Bookrunner on the transaction.

EIB completes record Kangaroo sustainability bond

  • The European Investment Bank (EIB) has completed a AUD1.5bn five-year Kangaroo sustainability-awareness bond – the largest ever AUD green, social and sustainability bond from a supranational.
  • Proceeds from the bond will go towards EIB lending activities that contribute to sustainability objectives in line with EU sustainable finance legislation.

TCorp prints sustainability bond

  • The investment and management partner of the NSW public sector has priced a AUD1.5bn sustainability bond set to mature in November 2032.

Jemena completes green private placement

  • Jemena completed an AUD300m private placement following the announcement of Jemena’s 2050 net zero ambition.
  • Proceeds will go towards projects covered in Jemena’s Green Finance Framework and is intended to be used for electricity infrastructure assets.

BNG Bank issues sustainability Kangaroo

  • The Dutch bank, which specialises in providing financing for publicly owned organizations, has issued a AUD500m 10.5-year sustainability kangaroo.
  • Proceeds from the bond will go towards lending to sustainable municipalities and sustainable social housing associations.

Denmark issues its first green bond

  • The Kingdom of Denmark’s first green bond attracted heavy demand. The SEK15bn raised will finance the country’s transition towards carbon neutrality and a more sustainable economy.
  • The eligible green expenditures included under Denmark’s Green Bond Framework support the production of renewable energy (including wind and solar energy), as well as the green transition of the Danish transport sector.

European Commission issues first green bond to finance sustainable recovery

  • The European Commission issued the first NextGenerationEU green bond, raising EUR12bn to be used exclusively for green and sustainable investments across the EU. The transaction currently represents the world’s largest green bond issuance.
  • The EU’s intention to issue up to EUR250bn in green bonds over the next 5 years could make the EU the largest green bond issuer in the world.

SCOR completes sustainability linked standby letter of credit

  • The French reinsurer has completed a 5-year sustainability linked standby letter of credit linked to SCOR’s ESG commitments.
  • The two commitments include a gender diversity target for the Group’s Executive Committee and a reduction in the carbon intensity of its corporate bonds and equities sub-portfolios.

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