As Canberra prepares to kick off green bonds later this year, Australia-New Zealand dual listee Meridian Energy (ASX:MEZ) has confirmed it’s now offering green bonds to Australian insto investors.
Also eligible are those retail shareholders residing in New Zealand.
The company is offering up to $200M of 6-year-long fixed rate green bonds using a piece of NZ legislation from 2013 that sees them adopt an existing asset class status recognised in the country.
The bonds will be quoted on the NZX Debt Market. As of early March 2024, Australian retail investors aren’t able to partake. Clients of joint lead managers (JLMs) ANZ, Craigs, Forsyth Barr and Westpac can get involved.
Notably, the offer isn’t underwritten.
Meridian wants the money to build out renewable energy assets. S&P Global Ratings has previously rated its bonds BBB+ “stable.”
Meridian boasts 372K customers in NZ and is one of its largest electricity retailers. The stock has long been on the frontfoot when it comes to renewable energy investment; Meridian oversees 5 wind farms in NZ.
The first goes back to 2004.
The green bond offer ties into a larger thematic to be introduced to Australian finance this year: the federal Treasury’s Green Bond Program (GBP).
“Sovereign green bonds will boost the scale and credibility of Australia’s green finance market and attract more green capital to Australia by increasing transparency around climate outcomes and the volume of green investments available,” the Treasury writes on an explanatory landing page.
Canberra intends to use the proceeds from bonds to accelerate its own adoption and development of renewables and other green technologies nation-wide. That was enough to get the attention of writers at the Wall Street Journal.
While ESG fell off the bandwagon through COVID-19 and its discontents, UBS tipped environmental and wider ESG themes to come back to prominence in 2024.
With the support of Canberra (and probably a good deal of self-high-fiving to follow,) it’s possible they could be on the money.