Green Bond Fact Sheet

Pepper Group

Date: 04-Feb-2019

Issue date: 06-Dec-2018 Maturity date: 18-Aug-2021 Tenor: 2.7Issuer Name

Pepper Group

Amount Issued

EUR110m (USD125.1m);
AUD75m (USD54.1m)

Country of risk

Australia

CBI Database

IncludedIssuer Type1ABS

Bond TypeRMBS tranches

Green Bond Framework

Link to framework

Second party opinion

Sustainalytics

Certification Standard

Not certified

Assurance report

N/A

Certification Verifier

N/AGreen bond rating

N/A☐ Energy☐ Solar☐ Onshore wind
☐ Offshore wind
☐ Geothermal☐ Hydro☐ Tidal☐ Biofuels☐ Bioenergy☐ District heating☐ Electricity grid

☐ Energy storage☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☒ Buildings☒ Certified Buildings☐ HVAC systems☐ Energyperformance☐ Water performance☐ Energy storage/meters☐ Other energy related☐ Industry: components☐ Adaptation & resilience☐ Transport☐ Electric vehicles☐ Low emissionvehicles☐ Bus rapid transit☐ Passenger trains☐ Urban rail

☐ Freight rolling stock☐ Coach / public bus☐ Bicycle infrastructure☐ Energy performance☐ Transport logistics☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Water & wastewater☐ Water distribution☐ Water treatment☐ Wastewatertreatment☐ Water storage☐ Storm water mgmt
☐ Desalinisation plants☐ Erosion control☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Waste management☐ Recycling☐ Waste prevention☐ Pollution control☐ Landfill, energy capture☐ Energy performance☐ Infrastructure☐ Waste to energy☐ Industry: components☐ Adaptation & resilience

Use of Proceeds☐ Land use & agriculture☐ Afforestation/parks☐ FSC Forestry☐ FSC Cellulose &paper☐ Land remediation☐ Energy/water efficiency☐ Sustainable agriculture☐ Adaptation & resilience☐ Other☐ Adaptation &resilience☐ ICT☐ Industry: process

Issue details
ReportingCompany information

The issuer has committed to annually reporting on proceed allocations. Where
feasible, qualitative and/or quantitative environmental impact reporting will also bedisclosed.
Pepper Group was founded in Sydney, Australia in 2001 and operates as aresidential mortgage and consumer lender, and loan servicer across nine countries
globally. (source)Firsts, records andcertifications

Second Australian issuer to come to market with an RMBS which includes green
tranches, after NAB’s AUD300m green RMBS tranche in February 2018.

Proceeds description

Eligible projects include green mortgages for properties using building codes from
New South Wales, Victoria, and Tasmania combined with BASIX, NatHers and NCC
BCA third-party standards. This ensures that the buildings are in the top 15% of themarket in terms of building energy performance.
To be eligible, properties located in Queensland, South Australia, WesternAustralia, Australian Capital Territory and the Northern Territory must comply with
the New South Wales’ properties eligibility criteria. According to Sustainalytics,
there are limitations to this approach as “applying the same building codes acrossdifferent regions may not lead to the same energy efficiency improvement becauseof variation [regional] in climate.” However, the SPO provider considers thiseligibility proxy a valid approach to identify top-performing buildings in terms ofenergy efficiency in the absence of suitable region-specific criteria.

Climate Bonds view

Underwriters
Deal comments
Credit Rating
Pricing summary
Investors summary

Eligibility criteria for buildings located in New South Wales, Victoria, and Tasmania
are aligned with market best practice. We agree with Sustainalytics that the use ofa proxy to identify top performing buildings for regions where specific eligibility
criteria cannot be applied yet demonstrates the issuer’s commitment to ensuring
the financed buildings have sound green credentials.

1Issuer categories: ABS, development bank, financial corporate, government-backed entity, loan, local government, non-financial
corporate, sovereign