National Australia Bank (NAB) today placed Australia’s first Sustainability Bond*, for Australian Catholic University (ACU).
The bond will fund projects related to green buildings, and research and development programs with social impact. NAB arranged the AUD200 million bond for ACU, which becomes the first Australian issuer, and the first university in the world, to issue a Sustainability Bond.
Mike Baird, Chief Customer Officer Corporate & Institutional Banking, said successfully arranging and placing the nation’s first Sustainability Bond demonstrates how the corporate and education sectors can partner to address pressing issues facing our society and environment.
“This bond shows how positive outcomes for communities and our environment can be incorporated into business decision-making,” Mr Baird said. “It is a critical step forward for the responsible investments market.
“Growing numbers of investors want to act on social and environmental issues, and are looking for options that demonstrate impact; we are developing ways to make that happen.
“ACU has shown commendable leadership in putting sustainability at the centre of its financial decision making, and NAB is proud to support a valued client with our deep expertise in raising debt capital.”
The 10-year, fixed rate bond has priced at semi-quarterly coupon matched asset swap plus 97 basis points, yielding 3.7425%. While the order book peaked at more than AUD500 million, ACU sized the bond at AUD200m. The debt is rated Aa2 (Stable) by Moody’s Investors Service. NAB arranged the bond and was joint lead manager alongside UBS.
The projects ACU is funding with the bond will help address several United Nations Sustainable Development Goals (UN SDGs), which are an important measure of impact and value for institutional investors. The SDGs focus on three dimensions of sustainable development; economic prosperity, social inclusion and environmental sustainability.
This is the first Sustainability Bond to be issued globally in alignment with the June 2017 update of the International Capital Markets Association (ICMA) Sustainability Bond Guidelines. The bond also aligns with ICMA’s Social Bond Principles (SBP) and Green Bond Principles (GBP).
This bond continues NAB’s track record of finding innovative ways to finance projects, including launching Australia’s first Climate Bond in 2014 and the world’s first Social Bond (Gender Equality) in 2017.
*Sustainability Bonds fund both Green Bonds and Social Bonds projects aligned to the four components of the SBP and GBP, as updated by ICMA in June 2017.