TCorp, the investment and financial management partner of the NSW public sector, has issued a $1.3 billion November 2030 green bond.
The investment manager reported investor demand had been strong, with the book being three times oversubscribed at final price, with bids totalling at $4.1 billion and it attracting a yield of 1.11 per cent.
Asset managers and insurers accounted for 57 per cent of the book, with 41 per cent of the investors being offshore.
Outside of Australia, most of the investors involved were from Asia, making up 27 per cent, while a tenth were from Europe.
Around one-fifth of investors were from official institutions, 2 per cent were from hedge funds and 2 per cent were traders.
Fiona Trigona, head of funding and balance sheet at TCorp, said the bond had attracted 68 investors, surpassing previous green and sustainable bonds.
“This bond has delivered our strategic objective of building and extending our ESG curve, currently unique in Australia,” Ms Trigona said.
“The NSW Sustainability Bond Programme now has $5.2 billion outstanding and we will continue to focus on adding liquidity into the new line over time.”
Worldwide, green bonds hit the $1 trillion milestone in issuance last week. Bertrand Rocher, a portfolio manager at Natixis-owned sustainable investing specialist Mirova said COVID had somewhat derailed the market’s growth, but it is expected to accelerate in the next few years until sustainability becomes the standard.
“We think however by around 2028/2029, it will grow at a slower pace,” Mr Rocher said.
“Why so? Because once a lot of players have adapted their business models to the ESG transition and funded the transformation through greener bonds, there will be less need for issuing in this space.”
The EU is issuing a significant amount, he added, forecasting as much as $300 billion could be issued in 2021.
“There is a combination of elements that have driven the market over the past decade, higher volumes, greater diversification in terms of industries and geographies,” Mr Roucher said.
“Better ratings and a sounder framework have driven this niche area into a fully-fledged market in its own right.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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