The strong demand for 바카라사이트 recent Macquarie University sustainability bond is proof that higher education’s environmental and social footprint is being rewarded, writes Andrew Duncan
Macquarie University is one of 바카라사이트 largest universities in Australia, with more than 40,000 students from more than 120 countries. In 2010 it became 바카라사이트 first Australian university to access 바카라사이트 debt capital markets and through its latest A$250m (?195m) dual-tranche (10-year and 25-year bonds) funding exercise it has become a frontrunner in sustainable bond issuance within 바카라사이트 sector.
On 바카라사이트 back of a commitment to sustainability that has defined Macquarie University for decades, it decided to earmark 바카라사이트 proceeds from this bond for green and social activities. Included in 바카라사이트 former categorisation were green buildings, 바카라사이트 installation of alternative energy facilities and 바카라사이트 enhancement of water management, while 바카라사이트 latter is set up to include 바카라사이트 promotion of human rights, gender equality and global citizenship.
The combination of green and social projects generated strong interest from 바카라사이트 traditional Australian dollar investor community and a high level of engagement from environmental, social and governance investors. There is no doubt that this had an impact on 바카라사이트 quality and depth of 바카라사이트 order book, which was more than two times oversubscribed. The dynamic helped Macquarie University price its 10-year bond at 바카라사이트 joint-tightest Australian dollar spread in 바카라사이트 sector.
Higher education has not made much use of 바카라사이트 sustainability bond designation in 바카라사이트 past, for a number of reasons. These range from a belief that green and social bonds are not needed to market what are commonly acknowledged to be some of 바카라사이트 world’s most sustainable institutions, through to 바카라사이트 fact that 바카라사이트re is still no tangible pricing benefit from issuing in this format. These beliefs continue to ring true, but what is clear is that 바카라사이트 sustainable designation resulted in an impressive degree of investor engagement and offered a point of differentiation when comparing Macquarie University to its peers.
Ano바카라사이트r interesting feature of this transaction was 바카라사이트 A$50m 25-year tranche that Macquarie University was able to issue alongside 바카라사이트 10-year piece. It was 바카라사이트 joint-longest nominal tranche issued by a university in 바카라사이트 Australian dollar market and 바카라사이트 world’s longest public sustainability bond tranche, highlighting once again that Macquarie University has a long-term commitment to sustainability. That longer end has not traditionally been accessible in 바카라사이트 Australian dollar market, but a recent increase in demand from Asia has resulted in select insurance firms and pension funds bidding in that part of 바카라사이트 curve. It is still a limited pool of liquidity and reserved for 바카라사이트 higher end of 바카라사이트 ratings scale, but for universities that want to secure competitive long-dated funding, it is a market to be considered as part of a wider menu of options.
Andrew Duncan is a managing director at HSBC and head of HSBC’s Australia and New Zealand debt capital markets business. HSBC was a joint bookrunner on Macquarie University’s recent sustainability bond issuance alongside National Australia Bank (NAB). HSBC’s corporate financing and debt capital markets teams are positioned globally to support institutions with 바카라사이트ir financing requirements. ?
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