News

KangaNews has launched its revamped sustainable bond league tables for the Australian and New Zealand markets, having updated the league table criteria to include sustainability-linked as well as labelled bonds, following a period of extensive research. The goal is to deliver a robust, best-practice methodology that can adapt to market evolution while demanding high standards from issuers and deal arrangers.

A key benefit of sustainable finance evolution for corporate borrowers is the growing range of products on which they can bring their sustainability strategies to bear. Green deposits are a relatively recent innovation and their use is growing – most recently through MUFG Bank’s first client sign-up in Australia, Sydney Airport.

World Bank’s recent US$150 million “rhino bond” is advancing biodiversity and natural capital, proving financial markets can fund conservation projects while simultaneously transferring project performance risk from donors to institutional investors, according to deal sources.

Investors must embrace multiple KPIs within sustainability-linked instruments to embrace the inclusion of gender equality goals, according to speakers on a recent International Capital Market Association sustainability bonds panel. Gender bonds using use-of-proceeds structures struggle to attract programme scale, limiting their ability to drive change.

The Australian Office of Financial Management’s latest transaction attracted a healthy orderbook despite printing in an increasingly volatile market. The agency says it took a strategic approach to execution, waiting out the recent federal budget and printing between central bank announcements.

South32 issued its inaugural public bond in the US dollar 144A market amid choppy conditions and in a tight execution window. The issuer says its debut lays the groundwork for future US dollar transactions.

Australian companies will likely not be able to avoid global climate reporting standards as offshore organisations ramp up disclosure requirements – whether or not there is a mandatory scheme domestically. Market participants say the international mood is changing and Australian companies and investors will have to shift with it.

As the Reserve Bank of New Zealand demands local banks increase their resilience through enhanced capital requirements, mutual banks face a familiar challenge: how to access additional capital without putting their mutual status under threat. The central bank is consulting on two potential capital instrument options for the mutual bank sector – but may not introduce either.

Export-Import Bank of Korea returned to the Australian dollar market for the first time since 2020 to print a dual-tranche deal with a multiday execution process that drew support from Asian commercial banks and investors further afield. The transaction’s dual-tranche structure also attracted legacy Kexim investors, according to deal sources.

Spark Finance elected to include a single sustainability performance target with a twofold measurement approach in its latest deal, New Zealand’s first sustainability-linked bond. Issuer and lead manager say the deal, which is linked to a greenhouse-gas emissions reduction target, received strong support from institutional investors.

Robust investor engagement supported AusNet Services’ first deal since the electricity and gas distributor’s acquisition last year by a Brookfield Asset Management-led consortium. The transaction was one of Australia’s first true corporate deals of 2022 and is a clear sign markets are calming, according to deal sources.

Strong growth in mortgage originations led Pepper Money to print its latest residential mortgage-backed securities just two weeks after its previous deal. Both are Australian dollar-only transactions, but the issuer is targeting a return to offshore currencies – particularly US dollars – later in the year.