Australian Ethical Super is a cornerstone investor in a new $100 million green bond issued by the Investa Commercial Property Fund.
Demand for the oversubscribed issuance was strong among both "green" and general debt investors, with the Clean Energy Finance Corporation also investing.
The issuance affords a semi-annual, fixed 4.25% coupon and are rated A- by Standard & Poor's. It has also been approved as a Certified Climate Bond by the London-based Climate Bonds Initiative, and proceeds will be used to retire existing debt facilities and will be fully allocated against a portfolio of low carbon buildings held in the fund's portfolio. The issuance matures on April 21, 2027.
Australian Ethical Investment managing director Phil Vernon said: "Investment in quality green bonds helps drive essential capital to the climate solutions and energy efficient infrastructure needed for the transition to a net-zero emissions world. Coupled with the underlying quality of the ICPF portfolio and the fund's performance, there was a compelling case for our investment in the ICPF Green Bond."
ICPF fund manager Jason Leong said the fund is pleased with the level of interest received in its first green bond issuance, "which clearly demonstrates the underlying quality of the ICPF portfolio and confidence in Investa's ongoing ability to deliver strong performance."
"Diversifying our sources of debt with green bonds demonstrates our support for the growth of the green finance market reinforces our leadership position in corporate sustainability and reflects our long-term commitment to transitioning to a low carbon economy," Leong said.
The critical factor in ICPF's green bond issuance is the use of the proceeds, according to Nina James, general manager, corporate sustainability.
"Given Investa's carbon reduction strategy and leadership in sustainable office building management and re-positioning, we plan to apply ICPF's green bond proceeds to low carbon building projects that meet the criteria set out in the Climate Bonds Standard," James said.
"This is yet another way Investa is proactively responding to investor demand for low carbon economy investment opportunities, further strengthening our position as a fund of choice for those looking to invest responsibly."
ICPF's portfolio of 14 office assets is valued at more than $4.1 billion and includes some of Australia's leading office buildings, including 420 George Street, Sydney, Deutsche Bank Place at 126 Phillip Street, Sydney and 567 Collins Street, Melbourne.