The City of Toronto has issued its first debenture in 2022 for $300 million to help finance important capital projects. This first debenture issuance has a low all-in cost of 3.37 per cent.
This conventional bond issue, with a 10-year maturity and a coupon interest rate of 3.25 per cent, will mature on April 20, 2032. It was issued on April 1 and will settle on April 20.
The proceeds from this issuance will be used to fund previously approved capital projects from several City divisions and agencies, including, Facilities Management, Solid Waste Management Services, Toronto Public Health, Transportation Services and TTC.
This issuance has a total of 34 Canadian and international investors and was slightly oversubscribed. Demand for municipal bonds remains strong despite concerns about inflation, demonstrating the confidence investors have in the City and the local economy.
This week, 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. The 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.
Quotes:
“The City’s award-winning debenture program will help us fund the capital infrastructure projects needed to help Toronto rebuild and recover from the COVID-19 pandemic. I am confident that Toronto will emerge from these difficult past two years stronger and more successful than ever before thanks in part to the foresight of our financial management strategy.”
– Mayor John Tory
“Investors continue to respond positively to the City’s responsible financial management throughout the pandemic and Toronto’s economic resilience. Our award-winning debenture program is leading the way while funding critical capital projects to support our growing city.”
– Councillor Gary Crawford (Scarborough Southwest), Budget Committee Chair
Toronto is home to more than 2.9 million people whose diversity and experiences make this great city Canada’s leading economic engine and one of the world’s most diverse and livable cities. As the fourth largest city in North America, Toronto is a global leader in technology, finance, film, music, culture and innovation, and consistently places at the top of international rankings due to investments championed by its government, residents and businesses. For more information visit the City’s website or follow us on Twitter, Instagram or Facebook.