SYDNEY, March 17 (Reuters) - National Australia Bank (NAB), the country’s fourth-largest lender by market value, said on Friday it sold A$500 million ($384 million) of “gender equality” social bonds, amid burgeoning demand for ethical investments.
Ethical investing in Australia has doubled to A$51.5 billion in the last two years, according to the Responsible Investment Association Australasia.
AMP Capital, which manages A$165 billion of assets, said on Thursday it would sell A$570 million worth of tobacco and weapon manufacturing-related stock and bond holdings under its revised Environmental, Social and Governance (ESG) programme and Responsible Investment Philosophy.
Australia is lagging many of its peers when it comes to responsible bond issuance. There has been a meagre A$3.5 billion worth of debt, nearly all green bonds, sold so far in the country.
Proceeds of the NAB issue will refinance loans made to a portfolio of businesses, including law firms and property companies, that have a gender equality citation from Australian government body Workplace Gender Equality Agency.
The self-arranged five-year issue, to be rated AA minus by S&P and Fitch and Aa2 by Moody’s, paid a margin of 95 basis points over bank bill swap rate.
Gender equality bonds are rare in the responsible investing space globally, but the NAB sale follows similar issues in Japan and Chile.
“We bought the NAB issue because it is difficult to access social bonds,” said Gavin Goodhand, a portfolio manager at Altius Asset Management.
The company runs a A$93 million sustainable bond fund which excludes tobacco, arm and thermal coal related investments.
Earlier this week, the financing arm of the state of Queensland, Queensland Treasury Corp (QTC), sold the biggest green bond to date by an Australian borrower with a A$750 million issue.
The offer was backed by four electric rail and rolling stock projects, a cycleway and a Queensland solar farm.
Green bonds are another type of responsible investing. ($1 = 1.3016 Australian dollars) (Additional reporting by John Weavers; Editing by Kim Coghill)
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