MUFG First in Japan to Issue Aussie Dollar-Denominated Green Bonds

Mitsubishi UFJ Financial Group (MUFG) will use the proceeds to finance green buildings and renewable energy projects through MUFG Bank.

MUFG’s green bonds amounting AU$500 million (US$337 million) were oversubscribed twice over. Australian institutional investors purchased most of the flotation.

MUFG issued this latest tranche in Australian dollars in a nod towards climate-conscious Australian investors. Moreover, the AU$500 million bond offering comprised both fixed and floating rate bonds of five years’ maturity.

MUFG’s green bonds

MUFG has now made seven issues of green bonds aggregating in equivalent $2.6 billion.

“Our consecutive issuance of the bonds was a step forward in our effort to contribute to the realization of a sustainable environment and society through our capital markets activities,” says the website.

MUFG allocates the net proceeds of the bonds to clients of its subsidiary, MUFG Bank, Ltd., for investing in projects that support a sustainable environment and society.

Notably, MUFG has put in place a Framework in respect of its green bonds. Further, Sustainalytics has issued an evaluation that “the Framework is credible and impactful, and aligns with the four core components of the Green Bond Principles 2018.”

Climate Bonds Initiative

The global green bonds market grew from US$37 billion in 2014 to a record US$167.3 billion in 2018.

Most green bond issues are oversubscribed, indicating solid appetite for these bonds.

Further, investors in green bonds benefit from:

  • Funding green projects without taking any additional risk or cost
  • Greater transparency into a bond’s use of proceeds
  • Meeting commitments as signatories of PRI and IIGCC
  • Reporting on the climate impact of fixed income investments to their end asset owner

Currently, over US$500 billion is outstanding in green bonds.

[Related story: Park Square Capital: Private Credit Investors in Favor of ESG-positive Deals]

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