The City of Toronto has issued its second green bond offering of $200 million.
“The City of Toronto, as Canada’s largest city and sixth largest government, has a responsibility to lead and take action to address the global threat of climate change,” said John Tory, mayor of the City of Toronto. “Green bonds are one more way the City of Toronto is demonstrating its commitment to being a clean, green, and sustainable city. The funds from the green bonds will ensure that we can make important investments to maintain and improve the health of the environment for present and future generations, such as public transit.”
This $200 million issue with a 20-year maturity and a coupon interest rate of 2.65 per cent, will mature on September 24, 2039 and settle on September 24, 2019. This represents the lowest borrowing cost the City of Toronto has been able to achieve for a 20-year term. Compared to a typical bond issuance, this bond yielded savings for the City of approximately $600,000.
Green bonds help fund capital projects that meet the City’s environmental objectives, including:
- Mitigation and adaptation to the effects of climate change.
- Abatement and avoidance of GHG emissions.
- Resource recovery and a hierarchical approach to waste management.
- Air, water, and soil pollution prevention and control.
Some of the City projects that will be financed through green bonds include:
- Revitalizing the Port Lands with the Port Lands flood protection.
- Renewing various City buildings, such as Toronto Community Housing buildings with energy efficiency retrofits, such as upgraded lighting.
- Expanding cycling infrastructure.
- Installing solar panels at City facilities to generate at least five per cent of its energy.
“With an increasing number of investors looking for environmentally and socially responsible investment opportunities, the City is excited to be a leader in the public sector and partner with industry to make real change, and reduce our carbon footprint,” said Heather Taylor, the City of Toronto’s chief financial officer. “Engaging with the capital markets through green bond offerings is a new venture. But it is also an important tool that will help the City deliver tangible and sustainable outcomes, financially and environmentally.”
The City of Toronto Green Bond Program has also received positive second opinion from Sustainalytics for its framework. Sustainalytics is a world leader in providing second opinions on the qualification of Green Bond Framework.
More information about the City’s Green Debenture Program can be found here.