Sustainable Finance Update: June 2022
A look at what’s been happening in the sustainable finance market in Australia and abroad.
Selected recent deals
NAB secures strong support for latest green bond
- NAB has received strong support for its latest A$1bn green bond.
- The issuer has committed to the proceeds from the green bond towards projects that meet the eligibility requirements of the Climate Bonds Standard Sector Criteria, such as renewable energy projects and green buildings.
- NAB has now issued five Climate Bond Initiative (CBI) certified green bonds and one CBI certified green RMBS tranche since becoming the first Australian issuer of a Certified Green Bond under the Climate Bonds Standard in 2014.
NBN Co completes inaugural green bond and publishes sustainability bond framework
- NBN Co has issued a A$800m green bond under its Sustainability Bond Framework. The issuer has committed the proceeds from the green bond towards projects targeting energy efficiency and renewable energy.
- The Framework also allows for the issuance of social bonds for projects that target wider access to essential services and socioeconomic advancement and empowerment as part of its sustainability bond framework.
- NAB acted as a Joint Lead Manager and Joint Sustainability Coordinator on this transaction.
Reliance Rail completes green sustainability linked loan
- Reliance Rail, a public private partnership established with the NSW Government to finance, design, manufacture and maintain Sydney’s Waratah train fleet, has completed a A$1.8bn green sustainability-linked loan that will refinance all existing bank debt facilities.
- The loan margin is linked to Infrastructure Sustainability Council (ISC) Operations Rating score, energy intensity of both the Auburn Maintenance Centre (AMC) and Waratah Trains, solar PV generation at the AMC, and operational water consumption.
- NAB acted as a Lender and Joint Sustainability Coordinator on this transaction.
Resimac includes social bond tranche in RMBS transaction
- Resimac Group, a non-bank home lender, completed the first social bond tranche offered by an Australian non-bank as part of its Residential Mortgage-Backed Security (RMBS) transaction.
- As part of the A$1bn Bastille Trust Series 2022-1NC transaction, proceeds from the issue of A$35m in social bonds are committed to go towards helping first home buyers enter the housing market.
- NAB acted as Joint Lead Manager and the social bond tranche was self-arranged
Pepper Money has priced social RMBS transaction
- Consumer finance company, Pepper Money, has priced debut social RMBS transaction and published its Social Bond Framework.
- The issuer has committed the proceeds towards helping an underserved and undervalued population with their mortgage loans.
- NAB acted as Sustainability Coordinator, Arranger and Joint Lead Manager on this transaction.
Plenti completes green ABS
- Consumer lender, Plenti, has launched a A$280m ABS transaction where A$65m of notes were green-certified under the Climate Bonds Standard.
- The issuer has committed the proceeds from the green tranche towards renewable energy.
- NAB acted as an Arranger, Joint Lead Manager and Sustainability Coordinator on this transaction.
Blackmores completes sustainability linked loan
- Australian natural health company, Blackmores, has completed a A$75m three-year sustainability linked loan.
- The loan margin is linked to reductions in Scope 1,2, and 3 greenhouse gas emissions, as well as a robust ethical and sustainable supply chain.
- NAB acted as a Lender on this transaction.
University of Tasmania raises green bond
- The University of Tasmania has priced a 10-year and 20-year dual tranche A$350m green bond, the largest green bond deal completed by an Australian university at the time.
- The issuer has committed the proceeds to new campus buildings that target a 20% reduction in the upfront carbon emissions embedded throughout construction.
- NAB acted as Joint Lead Manager on this transaction.
NAB closes its first ESG-linked Foreign Exchange (FX) derivative
- NAB has closed its first ESG-linked FX derivative with TRIG, a London company investing in renewable energy infrastructure projects. This follows a number of ESG-linked interest rate swaps in Europe and its first Australian ESG-linked interest rate swap in October 2021.
- The derivative is linked to clean energy, health and safety, and community targets.
- NAB acted Sustainability Coordinator and Hedge Counterparty on this transaction.
Wilmot Cattle Company secures green loan
- Wilmot Cattle Company, a producer of high quality grass-fed beef, has secured a NAB Agri green loan.
- The issuer has committed the proceeds to the purchase of Paradise Creek Station to continue to apply regenerative grazing principles.
- NAB Agri acted as a Lender on this transaction.
Metlifecare completes NZ’s first ESG linked derivative
- Metlifecare has completed a NZ$75m ESG linked derivative, tying the cost of the interest rate hedge to the KPI performance of their NA$1.25bn sustainability-linked loan.
- BNZ was the sole participating bank in this transaction.
Endeavour Energy signs sustainability-linked loan
- Endeavour Energy signs a A$920m five-year sustainability-linked loan, the first for an Electrical distribution network service provider at the time.
- The loan is linked to four targets that include reduction in greenhouse gas emissions, landfill waste diversion and be waste neutral by 2030, net habitat gain, and mental health and wellbeing.
Optus completes sustainability linked loan
- Singtel Optus, an Australian telecommunications company, completed a A$1.4bn three-year sustainability linked loan.
- The loan margin is linked to reduction in absolute greenhouse gas emissions.
Auckland announces first New Zealand local authority sustainability-linked loan
- Auckland Council signed NZ$200m sustainability-linked loan, the first to be secured by a local authority in New Zealand.
- The pricing of the loan is linked to three targets including procuring from Indigenous-owned Auckland business and social enterprises, increasing the number of low emissions buses in the city, and reducing greenhouse gas emissions at Auckland Council.
Spark Finance completes sustainability-linked loan
- Spark Finance, an Australian fintech that provides a cross-border lending platform, launched a NZ$100m 6.5-year sustainability-linked bond, the first sustainability-linked bond in the New Zealand market.
- The loan is linked to the reduction of absolute Scope 1 and Scope 2 greenhouse gas emissions. This target has been verified by the Science Based Target initiative (SBTi) to reduce absolute Scope 1 and 2 greenhouse has emissions by 56% by FY30 from an FY20 baseline.
Morrison & Co completes public-private partnership sustainability-linked loan
- Morrison & Co has completed a NZ$180m sustainability-linked loan for a public-private partnership managing five schools in New Zealand. It is the first Sustainability Loan for school facilities in New Zealand to be recognised and accredited for its environmental and social credentials.
- The loan is linked to energy efficiency, waste management, green building standards, water management and social features such as high quality, inclusive learning environments, access to local residents for community use and dedicated satellite classrooms for students with disabilities.
Fortescue completes its first green bond
- Iron-ore giant, Fortescue Metals Group Ltd. has tapped the US high-yield market with a two-part bond deal, completing a USD1.5bn bond which included a US$800m ten-year tranche green bond.
- The issuer has committed the proceeds of the green bond towards green projects aligned to Fortescue’s Sustainability Financing Framework including renewable energy, energy efficiency, storage, clean sea, and coastal freight transport.