First Kangaroo Green Bond

KBN's first Green bond issuance of 2018 was carried out in the Australian dollar market this week.

The transaction represents KBN’s inaugural Green bond transaction in the AUD market and is the first Kangaroo Green Bond from an agency issuer since March 2015. The benchmark was upsized to AUD450m from the initial AUD250m minimum deal size, marking KBN’s largest AUD transaction since they began issuing in the market 17 years ago. 

Head of funding and IR, Thomas Møller was pleasantly surprised to see the book approaching 500m.

- We have been active in the public green bond market since 2013 but have so far been focused on USD/NOK denominated trades.  However, we got very positive feedback from Australian investors on the green format when we were down in Australia in March and given our already solid investor base in Australia, we thought a green trade would be an excellent way to further deepen our AUD footprint.  We do see the Australian investors being very focused and knowledgeable of green investments.

The support from the domestic investor base was particularly strong.

- We saw a very solid 63% of the trade going to domestic acct. then Asia 19%, Japan 10% EEA 8%.  There were some dark green accts and in addition, several tickets where size was definitely motivated by the green format, says Thomas Møller.

Proceeds from the trade are earmarked funding for Norwegian local government investment projects eligible under our green framework.

Final Terms


Kommunalbanken Norway (“KBN”)


Aaa (Stable) / AAA (Stable) by Moody’s / S&P


2.70% Semi-annual


AUD 450 million

Price Date:

28th August 2018

Payment Date:

5th September 2018

Maturity Date:

5th September 2023

Re-Offer vs Swap:

+45bps vs. semi-quarterly coupon matched asset swap

Re-Offer vs Benchmark:

+55.25bp over 5.5% ACGB due April 2023

Joint Lead Managers:

RBC Capital Markets, TD