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NAB’s €500m debut offshore green bond oversubscribed

The proceeds of the offering, backed by a majority of fund managers, will be used to refinance renewable energy and low-carbon transport projects.

National Australia Bank has become the first lender Down Under to issue a public offshore green bond, collecting €500 million on the back of “strong investor demand”. 

The offering, which NAB said was “well oversubscribed”, provides the bank with access to a euro-denominated green bond market worth over €60 billion while broadening its investor base and diversifying its portfolio. 

More than half of the bond's investors are fund managers, with 30 percent accounted for by insurance companies or pension funds. Banks represent eight percent of the mix. More than 90 percent of the investors are based in Europe, a NAB spokesperson told Infrastructure Investor.

Proceeds from the bond will be used to refinance about 1.1GW of renewable energy and low-carbon transport assets in the UK, Europe, Australia and the Americas, as well as electrified rail infrastructure, NAB said. The bond will mature in 5.5 years. 

This is the second green bond issued by NAB following its inaugural onshore issuance of A$300 million ($230 million; €218 million) in 2014, used to fund 1.5GW of renewable energy projects in Australia. The offshore bond issue is also part of the bank’s wider strategy of providing A$18 billion in financing to environmental ventures by 2022.

“Increasingly, investors are looking for ways to generate measurable impact,” said Steve Lambert, executive general manager of the bank’s capital financing. “We remain very active in the clean energy sector and since October, we have committed over A$1 billion in finance to renewable energy generators globally.”

The spokesperson added the bank will continue to explore green bond issuance opportunities as part of its usual funding programme, subject to market conditions and the availability of eligible “green” assets on balance sheets.