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Australian first home mortgage-backed green bond

Location
National
Investment
Climate Bonds
Category
Renewable energy
Energy efficiency

Home loans supporting transition to net zero

National Australia Bank (NAB) is the first Australian bank to launch a green bond backed by residential mortgages that meet international low carbon buildings criteria.

The CEFC has made a cornerstone investment of $25 million in NAB’s $300 million tranche of Class A1-G Notes that were certified by the Climate Bonds Initiative (CBI).

$300m
green tranche
New
options for investors

International certification

The CBI Low Carbon Buildings criteria requires residential buildings to meet a net zero carbon emissions trajectory, aligned with the goals of the Paris Agreement to limit global warming to no more than two degrees above pre-industrial levels.

The CBI has reviewed Australian building codes and energy ratings schemes to determine which are in line with these trajectories.

Buildings approved under those codes and energy ratings schemes can automatically be deemed compliant with the CBI Low Carbon Buildings criteria and eligible for CBI certification, providing confidence for investors about the sustainability of the underlying assets.

It’s incumbent on us as a bank to play a part in addressing the bigger issues facing society, including Australia’s transition to a low carbon economy. This transaction is another small, but important, step in that journey.
Mike Baird
NAB

Pioneering approach to green bonds

NAB’s green notes were part of a larger non-certified $2 billion Residential Mortgage Backed Securitisation (RMBS). 

The securitisation extends the NAB’s pioneering approach to the green bond market in developing additional investment options for investors wanting to back sustainability and emissions reduction.

In 2016, NAB arranged the first Australian securitisation to include a green tranche, with a FlexiGroup securitisation backed by solar PV and renewable energy consumer receivables. The CEFC made a $20 million investment in that bond.

NAB was also the first Australian issuer of an Australian dollar denominated certified climate bond in December 2014 with a $300 million securitisation. The CEFC made a $75 million cornerstone investment in that bond.

 

National, Climate Bonds, Renewable energy, Energy efficiency