30/10/2025
8 minute read
Australia has recently published its 2035 NDC commitments. The levels suggest a fairly fast reduction of domestic GHG emissions is needed for the target to be achieved.
This article prices a transition linker structure based on those targets, using the current ACGB AUD2.75 05/2041 bond as baseline and with multiple step-ups and step-downs, linked to beating stretch targets and accelerating Australia's transition.
The structure could allow Australia to raise debt more cheaply, while providing investors with negative correlation to adverse transition scenarios.
A transition linker is a new form of performance-linked bond for investor, government, and general public interest transition alignment.
Adapting the transition linker concept for Latin America
Sustainability-Linked Bond could incentivise country’s transition
Investing in lower-emitting issuers can benefit investors, analysis shows
Greeniums of ‘twin bonds’ vary by country, while Denmark stands out
AFII's CEO on transition-linked bonds in Nomura's Sustainability Quarterly 2025
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