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NAB climate bond doubles in five hours

$300 million from NAB bond destined for wind and solar

NAB’s first climate bond issued in Australian dollars for the Australian market last week closed oversubscribed and at $300 million, double the size initially flagged.

According to a delighted Sean Kidney in his Climate Bond Initiative blog, the it took just five hours to reach this amount.

“Strong investor demand led to the bond doubling from the minimum deal size of A$150 we initially reported to $300 million within five hours! As the first domestic issuer in A$ NAB targeted Australian investors,” Kidney said.

The Clean Energy Finance Corporation agreed to be a cornerstone investor with a $75 million commitment, to soothe investors nerves for this new asset class, but the nervousness proved illfounded.

Australian Ethical invested $3 million.

An NAB spokesman confirmed that the bond was oversubscribed and that $300 million had been borrowed from investors.

“One hundred and fifty million was our minimum and we hoped it would go over that, and it did,” the spokesman said.

The bond is understood to be at a 4 per cent fixed rate with a tenor of seven years. But the spokesman would not say what kind of investors revealed such appetite, except that they were from “the sources you’d expect”.

Proceeds of the bond would go to wind and solar projects.

The bond has a tenor of seven years, and carries a fixed interest rate of 4 per cent, rated AA- by Standard & Pppr’s and Aa2 by Moody’s. It was the first bond certified under the Climate Bonds Standard.

The bond follows a 300 million Euro green bond issued by Stockland in November and a $300 milloin World Bank bond earlier this year.

Another of the big four banks is understood to be preparing to issue another bond early in the new year.

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