It aims to develop a funding pipeline for green loan products in the country
Non-bank lender Firstmac has advanced Australia’s green bond market by completing a $1.2 billion residential mortgage-backed securities (RMBS) issue, the first to include residential mortgages with rooftop solar proxy accredited under the Climate Bond Initiative.
The issue, which included $306 million in Green Bonds backed by mortgages on homes with solar panels, was priced at 1mBBSW+ 112 basis points (bps) for the Green Bond tranche and 1mBBSW+ 116bps for the top non-solar mortgage tranche.
According to James Austin (pictured above), chief financial officer of Firstmac, the RMBS issue is part of Firstmac’s ongoing efforts to create a funding pipeline for green loan products in Australia.
“We are very proud to have once again led the way in developing products that help to reduce Australia’s carbon emissions, after previously issuing Green Bonds for energy-efficient homes and also pioneering the reporting of greenhouse gas emissions from each vehicle in our auto bond issues,” Austin said.
Before issuing the solar residential mortgage bonds, Firstmac completed a rigorous certification process in line with the Climate Bond Initiative, an international organisation that mobilises global capital for climate action.
Firstmac’s Solar Home Loan helps homeowners lower electricity bills by installing solar energy systems at no cost. The loan offers a 0.6% interest rate discount for five years to borrowers who install a qualifying solar power system.
The central aim of Firstmac’s Climate Bonds is to strengthen Australia’s response to climate change by encouraging environmentally friendly housing and improving the energy efficiency of existing homes.
This successful issue follows a record $2 billion RMBS issue in February, backed by a larger proportion of investment property mortgages. It also follows a $300 million ABS issue backed by auto loans in November 2023 and a $500 million issue backed by SMSF loans in April 2024.
The total amount of RMBS and ABS issued by Firstmac since 2003 now stands at approximately $49 billion, including $3.7 billion in 2024 alone, marking a record six months for Firstmac.
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