ANZ Bank launch its first Green Bond:

In recognition of growing demand for investments satisfying Environmental, Social and Governance (ESG) mandates, the past week has seen ANZ Bank launch its first Green Bond. This bond issue forms part of ANZ’s commitment to support the transition to a lower carbon economy. The $600m raised will be used to finance a portfolio of ~$1.1bn of existing ANZ loans, that directly contribute to developing low carbon industries, technologies and practices. Specifically, the portfolio comprises loans to win and solar power projects and Green Star rated commercial property buildings in Australia, New Zealand and parts of Asia. The ANZ Green bonds provide the same credit risk profile as standard ANZ bank senior unsecured debt, where the payment of interest and principal on the Green bonds is not linked to the performance of the underlying eligible assets. Both the $600m 3.25% ANZ June 2020 Green bond and $1.9bn 3.25% NAB June 2020 bonds were priced on the same day at a margin of 0.80% over 5 year swap, equating to a Yield to Maturity of 3.385%.