31 May 2021

Port of Newcastle deal – Key Facts

On 4 May 2021, NAB announced its role in the development of a loan for Port of Newcastle. This loan aligned financing for Australia’s largest east coast seaport with long-term environmentally and socially responsible outcomes.

Read the full announcement here.

As Sustainable Finance Structuring Coordinator, NAB assisted in the development of both a sustainability-linked financing framework and green financing framework with Port of Newcastle.

This transaction has been widely reported across domestic and global media. Due to the complexity of the refinancing arrangement, some reporting has contained factual inaccuracies.

NAB is acutely aware of all the views around how to steward our planet safely and sustainably. We want to ensure the facts are clearly set out.

NAB is committed to achieving net zero emissions in its financing by 2050.

We’re the only Australian bank signed up for the UN Environment Programme’s Collective Commitment to Climate Action which provides us the framework to achieve this .

Key Facts on NAB’s role and participation in Port of Newcastle’s recent re-financing

  • NAB was one of a number of lenders involved in this transaction. NAB was not the only lender.
  • Port of Newcastle has been a long-standing customer of NAB. NAB did not “step in” to underwrite Port of Newcastle.
  • NAB’s exposure to Port of Newcastle did not change as a consequence of this recent re-financing.

Key Facts around Port of Newcastle Sustainability Linked Loan (“SLL”) and Green Loan Structure

  • NAB did not allocate the SLL loan exposure to its green bond asset portfolio.
  • There was no impact on NAB’s labelled bonds (which remain in compliance with the Climate Bonds Standard / Green Bond Principles). Specifically, SLLs are not included in the NAB green bond asset portfolio unless they also meet relevant criteria for green bonds.
  • Both Port of Newcastle’s Green Financing and Sustainability Linked Loan Financing frameworks are consistent with the applicable internationally recognised market standards and are the subject of Second Party Opinions from third party assurance provider DNV GL.
  • NAB is not one of the lenders in the green loan tranche of the refinancing.
  • The Port of Newcastle transaction is aligned with NAB’s current lending policies.

Key Facts around the Modern Slavery metric in the Sustainability Linked Loan

  • The Federal Act is a modern slavery risk management disclosure obligation. It isn’t prescriptive about how to manage and measure that risk (it asks you to explain what you do).
  • There are provisions in the sustainability-linked loan that incentivise specific modern slavery risk management practices and allow us to measure Port of Newcastle’s performance for modern slavery risk.
  • Specifically, Port of Newcastle will screen all suppliers and engage with the medium and high risk suppliers to work through any identified modern slavery issues.

Key Facts on Port of Newcastle’s role in the community and its diversity of trade

  • Port of Newcastle (PON) supports about 9,000 full-time equivalent jobs nationally.
  • The port handles approximately 4,400 ship movements, and 164 million tonnes of cargo annually. The port handles a diversity of international trade, including coal, wheat and other grains, fertiliser, steel, cement, bulk liquids, containers, machinery and alumina.
  • Port of Newcastle is diversifying its trade as it strives to create a safe, sustainable and environmentally and socially responsible future.
  • Port of Newcastle became the first port in Australia and New Zealand to be certified as an EcoPort in January 2020, a global environmental and sustainability standard for the ports sector.

You can read more here about how NAB is building a team of climate experts to support the low carbon transition plans of its customers.

David Gall, NAB Group Executive – Corporate & Institutional Banking, explains why skilling bankers in climate is important.

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