For the second year in a row, the City of Toronto has been awarded Social Bond of the Year – Local Authority/Municipality at the 2022 Environmental Finance Bond Awards. This award recognizes the City’s leadership in the green, social and sustainability bond and loan market and is for the issuance of the City’s second Social Bond last year.
The City was the first – and remains the only – government in Canada to establish a Social Debenture Program, demonstrating its commitment to sustainable finance, and to promoting positive and equitable socioeconomic outcomes.
The bond issuance was a re-opening of the City’s inaugural Social Bond, originally issued in June 2020, with a 10-year term and coupon interest rate of 1.6 per cent. It will mature in December 2030. It was the City’s second offering of a sustainable debenture of this type. This bond issue was priced with an all-in cost of 1.937 per cent bringing the total reissued bond to $200 million. Expressions of interest were in excess of nearly $250 million for this issuance, with strong interest from the environmental, social and governance community.
The proceeds from this award-winning Social Bond issuance are being used to help fund the Toronto Transit Commission’s Easier Access Program and the City’s George Street Revitalization project and other housing and shelter infrastructure developments.
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).
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.
In 2021, the City’s credit rating was reaffirmed by three credit rating agencies. Despite the pandemic, 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 a diversified economy – factors that have helped sustain the City’s fiscal performance.
More information about the City’s debenture programs is available on the City’s Investor Relations webpage: https://www.toronto.ca/city-go
More information about the Environment Finance Bond Award is available on the Environmental Finance website: https://www.environmental-fina
Quotes:
“I am proud that Toronto is once again being recognized for its leadership in the green, social and sustainability bond market. The success of our second Social Bond issuance demonstrates the continued confidence the market and investors have in Toronto and our responsible fiscal management before and during the pandemic. As part of our commitment, this bond will help us fund key capital projects that will help make the lives of our residents better.”
– Mayor John Tory
“We continue to be the only government in Canada to have a Social Debenture Program and once again the City has been recognized for this leadership. This program helps us to continue to invest in essential social services, affordable housing and critical infrastructure.”
– Councillor Gary Crawford (Scarborough Southwest), Budget Committee Chair
Source City of Toronto
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