02 April 2019
Issuer: Canada Pension Plan Investment Board Capital
Size: CAD1.5 billion ($1.2 billion)
Maturity: June 2028
Use of proceeds: Energy Efficiency; Renewable Energy; Sustainable Water Management
External review: Cicero
Lead managers: CIBC World Markets; RBC Dominion Securities
Credit rating: DBRS (AAA); Moody's (Aaa); S&P Global (AAA)
Other highlights/notable features: First pension fund green bond; Canada's largest green bond
Canada Pension Plan Investment Board (CPPIB) Capital's inaugural green bond was the first ever by a pension fund, as well as Canada's largest single green-labelled issuance, according to Environmental Finance's bond database.
CPPIB invests the assets of the CAD368.5 billion ($275 billion) Canada Pension Plan.
Proceeds from its landmark transaction are to be used to fund investments in Leadership in Energy and Environmental Design (LEED) Platinum-certified green buildings, and wind and solar, and sustainable water and wastewater management projects.
The notes, which have a tenor of 10 years and a coupon of 3%, drew 79 orders totalling $2.7 billion, CPPIB said.
Second opinion provider Cicero assigned the deal a 'medium green' shading, noting that the framework "has a balance of project categories between medium and dark green".
Judges commended the "large issue that can support such broad investment in the Canadian market", adding that the deal offered attractive pricing.
"The issuance of green bonds is a logical next step to CPPIB's investment-focused approach to climate change, and we are pleased to be a pioneer amongst pension funds in this regard," said Poul Winslow, the company's senior managing director & global head of capital markets and factor investing.
The deal paved the way for CPPIB Capital's second green deal, issued in January and worth €1 billion ($1.1 billion), which helped take overall Canadian issuance to $12.8 billion.