The first maturity of an Australian social impact bond (SIB), used to fund The Benevolent Society’s Resilient Families programme, marks an important point in the local development of the instrument, deal participants say. In particular, they point to the financial and social results as a validation of the use of SIBs to achieve social outcomes.
It would be easy to conclude from various market signals – including the limited flow of corporate issuance – that sustainability is not registering with Australasian corporate treasuries, at least when it comes to debt-market interaction. But the real story is in all likelihood rather more complex.
The biggest issue in the New Zealand debt market has historically been shortage of domestic supply relative to a demand pool that has grown significantly in the KiwiSaver era. In September, BNZ and KangaNews convened their annual New Zealand roundtable with a specific goal in mind: to discuss whether the national infrastructure need, the emergence of bank securitisation and other factors can radically change the supply landscape.
The race to save the planet is real. The science is grim – some say it is already too late to save our species. However, the fact that the transition to a low-carbon economy is as much an economic issue as an environmental one gives debt-market participants reason to be optimistic.