It expands green RMBS market with solar-proxy loans, targeting eco-conscious investors
Non-bank lender Firstmac has reinforced its position as a green bonds issuer with a $1.5 billion residential mortgage-backed securities (RMBS) issue featuring solar-proxy green loans.
The privately pre-placed issue marks the lender’s final bond offering of the year, following its $1.75 billion issuance in October.
“This has been a successful year for Firstmac, capped off with this issue which included a note backed by solar-proxy green loans,” said James Austin (pictured above), chief financial officer of Firstmac. “The solar bond is an instrument that is close to our heart as we seek to pioneer the Green RMBS Bond market, and it has also proven to be an attractive collateral for environmentally conscious Japanese investors.”
The latest RMBS issue, Firstmac’s second to include solar bonds, priced at a margin of 1.02% over the Bank Bill Swap Rate (BBSW), consistent with recent pricing for the lender’s bonds. The deal also included bonds backed by standard home loans.
The solar-proxy green loans underwent certification under the Climate Bonds Initiative, an international organisation focused on mobilising capital for climate solutions.
Firstmac’s Solar Home Loan product provides a 0.6% interest rate discount for five years to borrowers who install a qualifying solar power system. The product aims to reduce household electricity costs and promote environmentally sustainable housing.
Firstmac has positioned itself as one of the leaders in the green RMBS market, previously issuing bonds for energy-efficient homes and introducing emissions reporting for auto loans. The lender says its green bonds aim to encourage more energy-efficient housing and support Australia’s climate goals.
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