Ontario Construction News staff writer
The City of Toronto is reopening one of its recently settled debenture offerings for an additional $250 million to help finance critical capital projects. It’s the fourth public debenture issuance this year and the lowest 30-year term rate the city has ever issued with an all-in cost of 2.436 per cent.
“The funds from these bonds will ensure that we can make important investments to support recovery and rebuild efforts, and improve the City for future generations,” Said Mayor John Tory.
This conventional bond issue, which is a reopening of a 30-year maturity with a coupon interest rate of 2.80 per cent, will mature on November 22, 2049. This reissuance brings the bond’s outstanding amount to $600 million.
The proceeds from this issuance will be used to fund the completed portion of the approved capital projects from several City divisions and agencies, including:
- Transportation Services
- Toronto Paramedic Services
- Facilities Management
- Economic Development and Culture
- Exhibition Place
Demand for municipal bonds has remained strong in recent months, demonstrating the confidence investors have in the City of Toronto. Although the COVID-19 pandemic has caused significant economic impacts across the globe, capital markets continue to be optimistically focused on rebuilding economies.
“Expressions of interest were nearly double the amount for the $250 million being sold. This reflects highly on the City’s credibility and demonstrates the confidence investors have in the local economy,” councillor Gary Crawford, budget committee chair.
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 several Canadian investment dealers. Retail investors can contact their financial institutions to inquire about investing in the City of Toronto’s debentures.