Westpac Banking Corporation yesterday notified fixed income investors that it was launching a new five-year Australian dollar denominated benchmark senior unsecured series of medium term notes. The transaction will comprise a fixed and floating rate tranche, each with very different funding applications. The bank said in a media release, previewing the marketing of the medium term notes, that the proceeds of the fixed rate tranche would be "used to fund renewable energy and green building projects in Australia," the language used to brand 'green bond' or 'climate bond' issuance. (The floating rate tranche will not meet the green bond issuance definition, though, as the bank itself was at pains to point out.)The bank added that, "subject to market conditions, the transaction may launch in the near future." As Westpac Institutional Bank is the sole lead manager, the deal may well be launched and priced within a day. And if the transaction runs as planned, the fixed rate tranche will become Westpac's first direct issuance into the climate bond market. The two tranches of medium term notes are expected to be rated AA- by Standard & Poors and Aa2 by Moody's Investors Service, the Westpac announcement said. The use of the term 'benchmark' implies a combined issue size of at least A$500 million is contemplated and, depending on the standard of "Green Bond" definition adopted by Westpac for its fixed rate notes, the bank may well attract a group of local and international investors with sustainability mandates to fulfil that may not otherwise hold Westpac paper.However, as even the proponents of climate bonds concede from time to time, the majority of fixed income investors are likely to view the "green" label as an extra 'nice-to-have' feature, and will nevertheless expect a yield commensurate with this issuer's senior debt ratings.