Environmental Finance's Bond Awards 2023

Social bond of the year - sovereign: Government of Canada's Ukraine Sovereignty Bond

Following the Government of Canada's inaugural green bond issuance in March 2022, Canada returned to the sustainable debt market with a Ukraine Sovereignty Bond later in the year.

The C$500mm ($365 million) five-year bond, issued in November 2022, was designed to direct proceeds from the bond to Ukraine through the International Monetary Fund's (IMF) Administered Account for Ukraine, which Canada played a leading role in creating.

The funds are expected to support the Government of Ukraine to continue to operate in the face of Russia's illegal invasion, including by providing essential services to Ukrainians, such as pensions, the purchasing of fuel before winter, and restoring energy infrastructure.

The Ukraine Sovereignty Bond is in addition to the Government of Canada's C$2 billion in direct financial assistance to Ukraine, all of which has already been disbursed. Canada has also committed more than C$2.5 billion in military, humanitarian, and development assistance to Ukraine last year. This brings Canada's assistance in 2022 to more than C$5 billion.

Subject to negotiations with Ukraine, this additional loan will respect the spirit of the current debt service suspension agreement agreed by the Group of Creditors of Ukraine. This will have no impact on interest payments to bondholders, who will receive interest coupon payments on a semi-annual basis.

Deal highlights:

Issuer: Government of Canada
Size: C$500 million ($365 million)
Maturity: 24 August 2027
Coupon: 3.245%
Use of proceeds: The money is expected to provide Ukraine with general budgetary support, such as to help sustain basic government operations including essential services.
Lead managers: BMO Nesbitt Burns, CIBC, National Bank Financial Inc, RBC Capital Markets, Scotia Capita, TD Securities
Credit rating: Canada has a AAA credit rating
Other highlights/notable features: The bond will mature on 24 August 2027, Ukrainian Independence Day