The issuance of Australia’s largest Australian dollar-denominated green bond earlier this month has given the green bond market in Australia a boost, paving the way for other potential issuers to tap the market.
New South Wales Treasury Corporation (TCorp), the funding vehicle for the NSW government, successfully raised an A$1.8 billion 10-year bond earlier this month, the first under its new Sustainability Bond Programme.
A green, social or sustainable bond can be issued under the programme, which is aligned to the UN Sustainable Development Goals. The bond was jointly led by ANZ and two other banks.
The bond is part of TCorp’s drive to diversify its source of funding. “What was really driving the establishment of the programme was that we were seeking to diversify our investor base,” said Fiona Trigona, Head of Funding and Balance Sheet at TCorp.
“The Sustainability Bond Programme has helped to diversify our funding and to help future proof our funding programme,” she said.
Launched initially at A$500 million, the bond was well oversubscribed with an order book of more than A$2.5 billion from 57 investors, of which 15 were new. “The fact that we were able to tap into new ESG (environment, social and governance) investors was a really great outcome in terms of investor diversification,” said Katherine Palmer, TCorp’s Senior Manager, Funding and Balance Sheet.
Some 82% of total proceeds were distributed in Australia and 70% of the investor base were asset managers, according to the distribution statistics. Rated AAA/Aaa (S&P/Moody’s), the bond was priced at 43 basis points over the 10-year Commonwealth Treasury Bond Future Contract.