Austria and New Zealand prep debut green bonds for 2022
List of sovereign green bond issuers to be expanded with arrival of Austria and New Zealand next year
Austria and New Zealand will join the list of sovereigns to have issued green bonds next year, with the former appointing two structuring advisors to help design its green bond framework.
As previously reported by GlobalCapital, Austria had been analysing the issuance of green bonds before committing to a ‘red-white-red green’ bond debut in the first half of 2022.
New Zealand is also preparing to issue a debut green bond next year, following an announcement on Thursday by the country’s minister of finance, Grant Robertson, as part of New Zealand’s low carbon transition strategy.
"The New Zealand government has a legislated commitment to reduce net emissions of all greenhouse gasses to zero by 2050, and green bonds will provide both finance for specific government projects with environmental outcomes and create a framework where projects with clear benefits are delivered,” a spokesperson for New Zealand Debt Management told GlobalCapital. “At the delivery end, we are confident that there is now a solid pipeline of eligible projects, given the range of climate related programmes being considered across the Crown."
“In the market, there’s now a substantial and growing investor demand for sovereign green bonds, reflecting an increase in the number of investors with mandate to invest in green bonds,” said the spokesperson. “The demand demonstrates the likely enduring nature of the market, which is important when issuing long term bonds. Our bond issuance market is also larger than it has even been, assuaging concerns over liquidity and contributing to the decision. There’s also some evidence now that there may be a pricing benefit, at least in the short-term. We have also seen the development of accepted market best practice, and we are well-placed to benefit from this knowledge while considering too how to incorporate New Zealand specific elements into the programme.”
New Zealand aims to be a regular issuer of green bonds, with issuance in this format expected to be “an important and enduring part of the New Zealand government bond portfolio” alongside its nominal and inflation-indexed bonds, according to a statement by the New Zealand Debt Management Office.
The sovereign’s green bonds will be issued via syndication in the local currency, New Zealand dollars, with the details of its green bond programme expected in mid-2022 before the issuance of its debut green bond in late 2022.
The New Zealand Debt Management Office will appoint two of is primary dealers as structuring advisors and send out a request for proposals for its debut green bond in the near future.