Ontario set to issue green bonds in second issue, seeks a minimum of $500 million

The stage is placed for a second green bond issue through the province of Ontario. The province, which raised $500 million of four-year debt at 1.75 percent in October 2014, has announced the lead managers to have an upcoming offering. Given that marketing has begun, the deal might be priced as early as this week.

The province has appointed Bank of the usa Merrill Lynch, BMO Capital Markets, HSBC Canada, RBC Capital Markets and TD Securities because of its offering. On its previous deal, BofA Merrill Lynch, CIBC, HSBC and RBC Capital Markets literally key roles. Ontario has welcomed two domestic firms and said farewell to one.

The talk is the fact that Ontario is after at least $500 million, though there is room for that deal to grow, based on the Street. It’s understood the province needs seven-year money that will be priced in the context of its domestic funding costs.

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Attractive returns make green bonds a ‘game changer’

Certainly the issuer has given itself the opportunity to raise a healthy-sized issue. Just like its first offering, the province’s upcoming green bond concern is being registered as a global bond with the Securities & Exchange Commission. Ontario also takes the extra step of developing its green bond in consultation using the Center for International Climate and Environmental Research Oslo (or CICERO.)

Launching another green bond concern is consistent with what Ontario said when its breakthrough deal came to market. In those days, the borrower said it will “make the very first green bonds available through its current dealer group to Canadian and international institutional investors to assist establish a Canadian-dollar green bond market and attract new investors.”



Last year, the neighborhood market received a lift when Telus Corp. raised $225 million in green bonds in a deal that’s thought as the first time an environmentally friendly bond has been utilized to support a genuine estate financing. (It’s worth noting that an environmentally friendly bond was used to assist using the construction from the North Island Hospitals Project, a two-hospital complex on Vancouver Island which was done through a public-private partnership.) The main city raised was utilized to retire construction financing taken on to build TELUS Garden in Vancouver. The 10-year bonds were placed privately at a coupon of 3.40 percent.

In 2015, the European Investment Bank, a so-called supranational sovereign agency (SSA) and also the world’s largest issuer of green bonds, raised $500 million in the domestic market with an five-year offering at 1.25 per cent. That financing marked the very first time an environment awareness bond has been issued domestically with a non-Canadian issuer.

Waiting on BC’s onshore yuan issue

A little more than 3,000 kilometres towards the west of Ontario, the province of Bc is also on the point of make a little good reputation for its own: It will become the first sovereign issuer in the onshore interbank Chinese market. (Two international development banks have previously raised capital for the reason that market.)

The AAA rated province has named Bank of China and HSBC because of its inaugural issue of Panda bonds, having a deal expected by month’s end. The province made that call in regards to a month following the People’s Bank of China announced it had completed the registration process allowing the sale of 6 billion of yuan-denominated bonds. That registration C that also involved approval in the National Association of Financial Market Institutional Investors C occurred after BC has raised about $1 billion within the offshore yuan market.

bcritchley@postmedia.com