Yesterday, the City of Toronto issued its third social bond. Toronto was the first – and remains the only – government in Canada to establish a Social Debenture Program, furthering its leadership in sustainable finance while promoting positive and equitable socioeconomic outcomes.
This social bond issuance was for $235 million, with a 20-year maturity, a coupon interest rate of 4.55 per cent and will mature on July 27, 2042. It was issued on July 11 and will settle on July 27.
Despite sustained concerns about inflation and the economic implications from the rising interest rate environment, investor confidence in both the City and Toronto’s economy remains strong. This issuance was very well-received and has a total of 29 Canadian and international investors.
The proceeds will be used to fund Council-approved capital projects from several City divisions and agencies, such as Toronto Transit Commission’s Easier Access program, and the George Street Revitalization project.
The City’s Social Debenture Program advances positive social action and sustainability for all Torontonians. Eligible capital projects support social initiatives, including:
• Social and affordable housing
• Affordable basic infrastructure (access to transit, clean drinking water and sewage and sanitation systems)
• Access to essential services (long-term care, senior services and emergency shelters)
• Socioeconomic advancement and empowerment (public libraries and community hubs).
The City was again recognized for its leadership in the green, social and sustainability bond and loan market, winning the Social Bond of the Year – Local Authority/Municipality at the 2022 Environmental Finance Bond Awards for a second consecutive year. The international award was for the issuance of the City’s social bond last year.
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’s debentures.
The City maintains an AA credit rating by S&P Global, an AA credit rating by DBRS Morningstar, and an Aa1 credit rating by Moody’s. These ratings reflect the City’s prudent financial management throughout the pandemic, strong financial support secured from other orders of government, and Toronto’s deep and diversified economy – factors that have helped sustain the City’s fiscal performance during the past two years.
More information about the City’s debenture programs is available on the City’s Investor Relations webpage: www.toronto.ca/city-government
“I am proud that the City of Toronto was the first – and continues to be the only – government in Canada to establish a Social Debenture Program. Investing in positive social action and sustainability for all Torontonians is not just the right thing to do, it’s the smart thing to do to ensure Toronto’s economic recovery and our emergence from the pandemic stronger than ever before.”
– Mayor John Tory
“Investors remain confident in the City of Toronto’s prudent fiscal management and Toronto’s economic recovery. The proceeds from this bond will help us fund the critical capital projects needed to build a sustainable and equitable Toronto.”
– Councillor Gary Crawford (Scarborough Southwest), Budget Committee Chair
SOURCE City of Toronto