Toronto Issues Green Bond For Climate Action Projects

This is the sixth time the city has issued a green bond since its initial offering in 2018

The city of Toronto has issued a $100m green bond to help finance transformative climate action projects. The transaction is a reopening of the green bond originally issued in November 2022 and brings the total to $400m. This marks the sixth time the city has issued a green bond since its initial offering in 2018 and the third bond issued by the city this year.

This green bond, with a 20-year maturity and a coupon interest rate of 4.40 per cent, will mature on December 14, 2042. It was issued on September 15 and will settle on October 3, 2023. The proceeds will be used to finance council-approved capital projects addressing climate change at several city divisions and agencies such as Corporate Real Estate Management, the Toronto & Region Conservation Authority, the Toronto Transit Commission and Transportation Services. Projects funded include state of good repair, renewable thermal energy, Yonge-Bloor capacity improvements and cycling infrastructure.

Despite sustained concerns about inflation, the city reports that investor confidence in its financial management and Toronto’s economy continues to be strong and demand for municipal bonds remains high. It claims this issuance was well-received and had a total of 29 Canadian and international investors and was three times oversubscribed.

City Council has adopted an ambitious strategy to reduce community-wide greenhouse gas emissions in Toronto to net zero by 2040. The green bond programme is one of several initiatives the city is leading on as part of its TransformTO Net Zero Strategy. “The city of Toronto continues to take bold climate action and this green bond – our sixth since we became one of the first Canadian municipalities to issue green bonds – will fund capital projects to make life better and more sustainable for Torontonians, improving our health, growing our economy, cultivating social equity and building our resilience,” said Olivia Chow, mayor of Toronto.

“The city continues to be a leader in sustainability, leveraging our significant capital budget to invest in our communities and take climate action now,” added councillor Shelley Carroll (Don Valley North), Budget Committee chair. “Our green bonds are a sound financial investment and investors continue to show confidence in Toronto with their positive response to this issuance.”