Investors back Australia’s first green mortgage-backed bond from NAB
Investors have put AUD2 billion in to a Residential Mortgage-Backed Securitisation (RMBS) from National Australia Bank (NAB) that includes Australia’s first Climate Bond Certified green tranche.
The green tranche comprises AUD300 million of NAB-originated mortgages for Australian residential properties that meet the Climate Bonds Standard Criteria for Australian low carbon residential buildings. It attracted socially responsible funds and more mainstream investors from Australia and internationally, and was close to two times oversubscribed.
Mike Baird, Chief Customer Officer Corporate & Institutional Banking, said the transaction is another example of how NAB is making sustainable investments more accessible.
“We are thinking outside the box when it comes to helping our customers back sustainable assets and act on environmental issues that are important to them, and to Australian communities,” Mr Baird said.
“It’s incumbent on us as a bank to play a part in addressing the bigger issues facing society, including Australia’s transition to a low carbon economy. This transaction is another small, but important, step in that journey.”
The green RMBS is part of NAB’s focus on creating demand in the socially responsible investment ecosystem, so it can continue to create financial products that address social and environmental issues. In November 2017, the bank committed to reach $55 billion in environmental financing by 2025, including $20bn to support corporate finance and $35bn to support new six-star residential housing in Australia.
It is the first Australian RMBS to meet the criteria for certification under the Climate Bonds Standard by the Climate Standards Board of the Climate Bonds Initiative (CBI). It is also the world’s first RMBS with an underlying pool of non-green and green residential mortgage securities that has been Climate Bond Certified by CBI.
About the RMBS
The Capital Relief National RMBS Trust 2018-1 is backed by prime residential mortgages originated and serviced by NAB. The senior ranking class A-1A (non-green) and A-1G (green) notes priced at 85 basis points over the one-month bank-bill swap rate and rated Aaa and AAA by Moody’s Investors Service and Fitch Ratings respectively. NAB was arranger and lead manager.