NZ’s first new retail green bond issue for 2020 blooms with Chapman Tripp’s help

The $200m bond offer included $50m in oversubscriptions, the firm says

NZ’s first new retail green bond issue for 2020 blooms with Chapman Tripp’s help

Chapman Tripp has advised in the successful issuance of the inaugural green bonds in Mercury’s new green financing framework, representing New Zealand’s first new retail green bond issue for 2020.

Tuesday’s quotation of Mercury’s MCY030 bonds on the NZX debt market completed the issue, the firm said. The green financing framework was launched last month with the firm’s help, and could include both bonds and loan facilities.

“The $200m seven-year bond offer included $50m in oversubscriptions and was priced at a coupon of 1.56% per annum, representing a margin of 1.25% per annum over the underlying swap rate,” Chapman Tripp said.

Lead partner Cathryn Barber, who heads up the firm’s national finance group, said that the transaction “reflects the growing market for sustainable finance in New Zealand and complements Mercury’s published approach to climate change preparation and integrated reporting.”

She worked together with the firm’s sustainable finance expert, senior associate Luke Ford, and the team faced the challenge of executing the deal while Auckland was battling a resurgence of the COVID-19 pandemic.

“The offer launch, including lodgement of the product disclosure statement, was completed during the most recent Auckland lockdown. Logistical challenges were further increased by the recent cyberattacks on the NZX,” Barber said.

With this landmark transaction, Mercury has been granted programmatic Climate Bond Standard certification.

“Mercury’s green financing framework and inaugural green bond are key milestones for Mercury, reflecting Mercury’s desire to promote renewable energy and the positive environmental and economic outcomes of investing in renewable energy assets,” acting treasurer Geoff Smits said. “We want New Zealand to make the most of its renewable energy advantage, using it to realise a low carbon future for all New Zealanders, including the huge opportunity in transitioning the country’s vehicle fleet to electric and reducing our dependence on imported fossil fuels.”

Smits praised the Chapman Tripp team, and said that the firm’s advice from the inception of the deal to its execution was “invaluable.”

“Leveraging Chapman Tripp’s knowledge, depth of experience and willingness to go the extra mile resulted in a very smooth process,” he said.

Mercury’s green bond verification was provided by DNV GL. ANZ served as arranger, joint lead manager and green bond coordinator on the transaction, while BNZ, Craigs Investment Partners and Forsyth Barr were joint lead managers. Bond supervisor The New Zealand Guardian Trust was advised by Bell Gully.

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