NAB's green bond given green light

National Bank of Australia is marketing a senior unsecured debt instrument as a "green bond," seeking a minimum of A$150 million to finance renewable energy facilities. The Clean Energy Finance Corporation has been drawn in as a A$75 million cornerstone investor.

Antony Cahill, NAB's group executive for product and markets, said investors had an opportunity to invest in a bond with the same features of any senior, unsecured NAB bond - but with the additional benefit of being dedicated to financing climate change solutions.

The instrument, pitched as the "NAB Climate Bond", is the first bank-issued bond to be certified in compliance with international standards for financing climate change projects. In NAB's case, it's a portfolio of renewable energy assets, including wind farms and solar energy facilities, in most states of Australia.

NAB said fourteen of these facilities were already operational and three were under construction. All are project finance facilities originated and serviced by NAB, which was keen to spruik its credentials in this area.

"NAB has committed more than $1.7 billion worth of loans for renewable energy projects over the last seven years and we continue to be the leading arranger by market share in Australia," a bank spokesperson said.

It is understood that demand has already been so strong for these bonds that the issue is likely be upsized to at least $300 million.