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The Australian Prudential Regulation Authority’s decision to reduce the size of the committed liquidity facility to zero by the end of next year may not be entirely surprising but it has ramifications across the local fixed-income market. The most obvious are on the demand side, but a closer examination of the decision’s implications also reveals likely consequences for supply dynamics.
The private-debt asset class is growing as investors seek reliable return in the ultra-low rates and spread environment. As private debt becomes increasingly mainstream, Commonwealth Bank of Australia and KangaNews explore how investors integrate environmental, social and governance practices in their strategies.
Last year, KangaNews conducted a focused research project to gauge exactly what Australian and New Zealand fixed-income investors want from issuers when it comes to environmental, social and governance credentials. The second iteration of this focused survey, conducted in September 2021, finds investor attention is still centred on issuer-level analysis – though evolution of labelled securities is also catching attention.
Despite lockdowns and COVID-19, corporate Australasia is optimistic, according to the 2021 KangaNews-Moody’s Investors Service Corporate Borrowers’ Intentions Survey. The results highlight favourable market conditions are expected for future funding plans.
One of the most significant aims of sustainable finance is developing climate-reporting standards that are as quantitative and robust as financial reporting. New Zealand is taking a global lead on mandatory climate reporting but there is much work to be done to reach the end goal.