How did ANZ Bank raise €1bn for a more sustainable future?
Australia and New Zealand Banking Group (ANZ) has issued an inaugural EUR-denominated SDG Tier 2 capital instrument, marking a key milestone in the development of sustainable finance.
The landmark transaction is the first green/sustainability Tier 2 issuance from an Australian bank, raising EUR1bn to finance lending to sectors such as education, environment and care of the elderly. The bond attracted a resounding response from over 150 European and Asian institutional investors. 1
The deal also brings the total size of ANZ’s green and SDG bond issuance to AUD3.4bn (EUR2.1bn)2, and is a step towards ANZ achieving the enhanced Total Loss Absorbing Capital (TLAC) requirements released by the Australian Prudential Regulation Authority (APRA) and scheduled to be met by January 20243.
A promising way forward
The world faces a USD2.5tn annual investment gap4 as it strives to achieve the United Nations’ (UN) Sustainable Development Goals (SDGs)5 by 2030. To that end, financial institutions globally are ramping up efforts to raise funds and channel them towards projects that prioritise sustainable development as the central aim. Investor interest in ESG (Environmental, Social and Governance) principles is also surging worldwide. This is evidenced by a new record set in 2019 for the volume of sustainable debt issued globally, with the total hitting $465bn, up a remarkable 78% from $261.4bn in 20186.
In 2019 alone, Societe Generale’s APAC Debt Capital Markets team led nine such sustainable bond transactions on behalf of clients across Australia, China, India, Malaysia and South Korea, raising a total of EUR4.75bn.
A fruitful partnership
As a founding signatory of the Principles for Responsible Banking, Societe Generale supports clients in their sustainable and positive impact finance projects. It has renewed its commitment to the UN’s SDGs and Paris Agreement targets by pledging to raise EUR120bn for energy transition between 2019 and 2023, of which EUR100bn will be through sustainable bond issuances with EUR20bn dedicated to the renewable energy sector through advisory and financing7.
Societe Generale’s experience and advice contributed to the successful execution of this transaction which helped ensure a positive outcome for investors and for ANZ... We look forward to similarly productive partnerships in the months and years ahead to foster interest and engagement in green finance, and help build a sustainable future.
Our market-leading bond franchise for financial institutions in EUR allowed us to mobilise expertise across various teams in Australia, Asia and Europe to tailor our advice and provide best execution for ANZ. This deal reflects Societe Generale’s strong track record in debt capital markets and sustainable finance.
As Malhotra noted: Being the first French bank to issue benchmark green bonds and acting as bookrunner on more than 100 green/social/sustainability bonds globally over the past few years, Societe Generale is committed to partnering with our clients in our sustainability journey together.
1 https://institutional.anz.com/insight-and-research/November/anz-issues-billion-tier-2-SDG-bond#:~:targetText=ANZ%20has%20issued%20its%20second,care%2C%20education%20and%20the%20environment
2https://institutional.anz.com/insight-and-research/November/anz-issues-billion-tier-2-SDG-bond#:~:targetText=ANZ%20has%20issued%20its%20second,care%2C%20education%20and%20the%20environment
3https://www.apra.gov.au/news-and-publications/apra-responds-to-submissions-on-plans-to-boost-loss-absorbing-capacity-of
4https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2542
5https://www.undp.org/content/undp/en/home/sustainable-development-goals.html
6https://about.bnef.com/blog/sustainable-debt-sees-record-issuance-at-465bn-in-2019-up-78-from-2018/
7 https://www.societegenerale.com/en/newsroom/societe-generale-accelerates-its-commitments-in-favour-of-a-responsible-ecological-transition