BISHOP It has been on our radar in the last 12-18 months in particular. The main reason for us to explore a green-bond transaction is that, as a New Zealand council, we pride ourselves on being environmentally friendly. From a reputational point of view it would be a beneficial funding option for us. On top of this, there is an aspect of investor diversification that could be achieved via green bonds.

It is certainly an opportunity at the forefront of our thinking and we may look at it over the next 12-24 months or even sooner. If we issue a green bond it will not necessarily be New Zealand dollar denominated, though. It is more likely to be issued in an offshore currency like US dollars or euros. But again, because we swap all our funding back to New Zealand dollars we are agnostic about offshore-currency avenues.

BUSH We have been looking closely at opportunities within the green-bond space and would like to support the development of the asset class. We have been encouraged by the development of this market, particularly from the investor perspective, having had increased engagement with investors during our roadshows. What this means is that investor engagement has formed part of the potential viability of green bonds for us, and the existence of specific investor demand is becoming increasingly apparent.

WHITFORD The TCV deal was an important one for the state of Victoria as it is an integral part of the sustainability programme. While these bonds are not a core part of our issuance, it is likely we will look at the market again in the 2018 calendar year for another small deal. However, this remains dependent on our ability to identify ongoing green projects for funding.

When we executed our green-bond transaction we thought about the effect it would have on our programme and where it would fit into the five-year part of the curve. We decided it was not going to affect liquidity dramatically because our four-and six-year lines are both large.

NICHOLL We have been discussing the general idea of green bonds with Treasury in broad terms. But any plan to issue a green bond would be a policy decision by the government. It is possible that if the Commonwealth wanted to facilitate the further development of the green-bond market it could issue its own green bond to that end.

The question for the government would be why it would embark on a sovereign green-bond programme. I would argue that, at present, we don’t need this either from a funding-volume or an investor-diversification perspective.

COLLARD Export Finance and Insurance Corporation has considered issuing in the green-bond space but to date we have not had suitable assets to warrant this type of funding.

TRIGONA We view green bonds like any other product. We are always exploring opportunities to diversify our funding but at this point we are not close to issuing.

KENNEDY We continue to monitor developments in the green-bond space.

JONES Green bonds are something we are not actively targeting at the moment. We get asked about issuing in other currencies but we don’t receive enquiry around green bonds.

BUTCHER Some borrowers issue green bonds to tick the political feel-good box or to expand their investor base. But we don’t presently see any rationale for issuing green bonds unless there is a price advantage to doing so once we have factored in the related initial and ongoing costs. Investors repeatedly ask us to issue in foreign currencies but we have not received a single enquiry around issuing green bonds.

COLLINS We have researched green bonds but have not seen any economic reasons to issue. We believe issuing green bonds would fragment liquidity, albeit modestly, in our benchmark lines.

There is the potential to attract some new investors into our programme through green-bond issuance. But these investors are more likely to want to invest in smaller volumes. Therefore, by the time we have factored in the complexity of green-bond issuance – compliance, accreditation, legal and documentation expenses and so forth – we think any cost or yield advantage that might exist would be eroded.

However, there may be some political advantages to this issuance format that could outweigh the cost element, so at some point green bonds may become important at state level. For now, we do not see a cost advantage and we think it would have a modest adverse liquidity impact on our existing lines. Therefore we do not see a compelling reason to issue at this point in time.