Firstmac prices Australian-first solar bonds
Non-bank lender Firstmac has continued its pioneering work developing the Australian Green bond market by completing a $1.2 billion RMBS issue which is the first to include residential mortgages written under the rooftop solar proxy accredited under the global Climate Bond Initiative.
The issue, which featured $306 million dollars of Green Bonds (backed by Australian residential mortgages on homes with solar panels installed), was priced at a very tight 1mBBSW+ 112bps for the Green bond tranche, and 1mBBSW+ 116bps for the top non-solar mortgage tranche.
Chief Financial Officer James Austin said the RMBS issue was just the latest in a series of initiatives launched by Firstmac to develop 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,” Mr Austin said.
Before issuing the solar residential mortgage bonds, Firstmac completed a rigorous certification process in line with the Climate Bond Initiative, an international not-for-profit organisation that works to mobilise global capital for climate action.
Firstmac’s Solar Home Loan helps homeowners beat soaring electricity bills by installing a solar energy system at effectively no cost.
The home loan, which is the first of its kind, offers a 0.6% interest rate discount for five years to borrowers who install a qualifying solar power system which is large enough to make a real impact on the power they take from the grid.
The central aim of Firstmac’s Climate Bonds is to strengthen the Australian response to the threat of climate change by encouraging homebuyers to seek more environmentally friendly housing and encouraging existing borrowers to improve the energy efficiency of their existing housing.
The successful issue follows a equal-record $2 billion RMBS issue in February, backed by a larger-than-usual proportion of investment property mortgages.
That followed a $300 million ABS issue backed by auto loans in November 2023, and more recently, a $500 million issue backed by SMSF loans in April 2024.
The issue brings the total amount of RMBS and ABS issued by Firstmac since 2003 to approximately $49 billion, including $3.7 billion in 2024 alone, marking a record six months issuance for Firstmac.
Brisbane-based Firstmac Limited is an independently-owned Australian financial services provider with more than 40 years of experience in home and investment loans. It has written in excess of 130,000 home loans and has more than $15 billion in home loans under management. Firstmac also has a growing auto finance business with a current portfolio of $750 million. Firstmac is a premier sponsor of the Brisbane Broncos.
This article was provided by Firstmac.
