City of Toronto issues fourth green bond to fund key capital projects

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Ontario Construction News staff writer

The City of Toronto has issued a new green debenture for $150 million to help finance key capital projects. Overall, this is the fifth debenture issuance this year, with a low all-in cost of 2.3 per cent.

This green bond issue, with a 10-year maturity and a coupon interest rate of 2.2 per cent, will mature Dec. 21, 2031 and marks the fourth time the city has issued a green bond since its initial green bond offering in 2018.

“The city’s successful green bond program offers sound investment opportunities for investors while funding our sustained efforts to rebuild from the COVID-19 pandemic,” said Mayor John Tory. “This most recent issuance bolsters our efforts and will support projects that enhance environmental outcomes for the residents of Toronto.”

Proceeds will be used to fund approved green capital projects for Solid Waste Management Services, Toronto Community Housing Corporation (TCHC). Toronto Transit Commission (TTC) and Waterfront Revitalization.

Work will focus on the Dufferin Organics Processing Facility which processes some of Toronto’s organic waste into renewable natural gas, a low carbon fuel; energy efficiency retrofits in TCHC buildings; the purchase of electric buses; and Port Lands flood protection will be funded in part by the issuance of this green bond.

This issuance has a total of 29 investors from Canada and internationally and was more than 1.4 times oversubscribed.

Toronto has one of the largest municipal borrowing programs in Canada. It is a regular issuer in the public Canadian debt market, with several sinking fund debentures each year. Debenture issues are initially distributed and traded by Canadian investment dealers. Retail investors interested in investing in the city’s debentures can contact their financial institutions.

“Investor response to our most recent debt issuance continues to demonstrate a confidence in both Toronto’s economy and the city’s responsible fiscal management throughout this pandemic,” said Councillor Gary Crawford.

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