Housing New Zealand
New Zealand’s environmental, social and governance (ESG)-themed bond market took another giant leap on 28 March, with the pricing of Housing New Zealand (Housing NZ)’s debut sustainability bond. The deal nearly doubles the total size of the New Zealand ESG-themed market and drove investor diversity and a positive pricing outcome for the issuer.
COVID-19 has spurred record volume of social-bond issuance and some sustainable-finance experts believe the crisis will be the catalyst for much more widespread adoption of the instrument. Despite the best efforts of advocates, however, the hurdles to habitual use of social bonds, especially in the private sector, remain high.
It has been two years since Kāinga Ora – Homes and Communities re-entered debt capital markets, in which time the agency’s funding requirement and market footprint have grown significantly. Sam Direen, treasurer at Kāinga Ora in Wellington, discusses the development of the funding programme including the emphasis on sustainable debt and the impact of the COVID-19 crisis.
New Zealand’s government-sector issuers experienced market upheaval as severe as their neighbours in Australia during the height of the COVID-19 crisis in March and April. Intervention from the Reserve Bank of New Zealand (RBNZ) and an enviable pace of economic reopening have improved the outlook, but issuers at a KangaNews-Westpac roundtable in June say plenty of challenges remain to be faced.
On 14 May, following the release of the New Zealand budget for financial year 2020/21, Kāinga Ora – Homes and Communities announced an update to its expected medium-term financing requirements. The issuer says new housing plans give clarity to the market on Kāinga Ora’s funding needs.
Inflation-linked bonds could come to form a greater portion of Kāinga Ora – Homes and Communities’ funding portfolio as it provides long-term funding matched to its primary revenue stream, the issuer tells KangaNews after its debut deal in the format.
HIGH-GRADE ISSUERS YEARBOOK 2020
The ultimate guide to Australian and New Zealand government-sector borrowers.