So far, the only banks to have issued sustainability-themed bonds denominated in Australian dollars have been domestic institutions – just one of the reasons why deal volume has yet to catch fire. One positive sign is the conduciveness of the Australian dollar market for high-grade issuers, including to global supranational, sovereign and agency names.
Pepper Group (Pepper)’s latest residential mortgage-backed securities (RMBS) transaction featured two tranches backed by green mortgages, one denominated in euros, and also added a US dollar note. The issuer has a firm commitment to issuing further euro-denominated green tranches, which it hopes will unlock European demand as its funding requirement continues to rise.
On 27 November, Pepper Group (Pepper) launched its indicative A$750 million (US$541.6 million) equivalent residential mortgage-backed securities (RMBS) transaction, PRS 22. The forthcoming deal includes notes denominated in Australian dollars, euros and US dollars. The Class A1-G€ and Class A1-Ga notes will be exclusively backed by green mortgages.