"Peak greenwashing"

1 minute read

We review the decision of Citigroup to operate as a sole lead on a new bond issue for the world's biggest coal export terminal, and comment on AFR's article on NAB "peak greenwashing."

Citigroup has decided to take on the task of getting more capital for the Port of Newcastle through issuing bonds for funding entity Newcastle Coal Infrastructure (NCIAU).

The deal was originally slated to be benchmark size, but eventually only printed an amount that would normally be considered as sub-benchmark. It is noteworthy that Citi was the only real investment bank syndicating the deal. In addition SMBC Nikko and NAB were joint leads.

We believe it is likely that other global investment banks refrained to participate in the deal. This is mainly because some engagements that we explain in our report are likely to be frowned upon for banks seeking any form of climate alignment or wanting to issue green bonds in the future or joining acronym alliances.

Note that banks syndicating a bond deal usually take on bonds on their own balance sheet as well - especially when the size of the book does not reach intended levels - so Citi is likely to directly have lent money to NCIAU in this transaction.