Social bond of the year - local authority/municipality: City of Toronto
The City of Toronto successfully launched and priced a C$100 million ($80 million) 1.60% Dec 2030 social bond on 16 June 2020, following the release of the City's Social Debenture Framework.
The issue garnered strong demand—including strong interest from the ESG community—in excess of C$400 million, with a total of 36 investors participating and interest largely driven by asset managers, banks, and insurance companies. Investors with ESG mandates represented 70% of overall sales.
The City of Toronto also deserves recognition for its role as a trailblazer in the social bond space; this transaction marks the first social bond by a Canadian Government issuer and only the third social bond issued globally by a local government in accordance with the ICMA Social Bond Principles. The City of Toronto has developed a detailed plan for its social impact goals, which it updates regularly.
This inaugural bond by the City kicks off large investments in its housing action plan to deliver social and affordable housing investments, deploy affordable basic infrastructure to communities, and support socio-economic advancement and empowerment. This C$100 million issue will provide capital funding for the project including the City's 1000 Shelter Bed goal and its George Street Revitalisation for the surrounding vulnerable population.
“In the midst of a global pandemic, this $100 million issuance ensures the City can continue investing in essential social services, affordable housing and critical infrastructure. The first of its kind in Canada, the Social Debenture program demonstrates our commitment to equitable social advancements for all Torontonians. The success of this social bond offering shows the continued strong market confidence in the City of Toronto” commented City of Toronto Mayor John Tory.
The City's CFO and Treasurer, Heather Taylor said: "The pandemic has put pre-existing systemic socio-economic inequalities and poverty into the spotlight. We need to address these issues at the forefront of our thinking. The City of Toronto's $100 million social bond proceeds has helped fund critical strategic initiatives that include shelters and affordable housing. In the face of competing challenges and priorities, the City of Toronto will continue to lead with a sense of purpose. With support from our partners and investors, we will continue to innovate and lead transformation to ensure we nurture a prosperous, inclusive and liveable city, with a high quality of life for its residents now and in the future."
One Environmental Finance Bond Awards judge also noted the bond carried with it a combination of a strong framework and detailed impact reporting, meaning it could serve as a template for other municipalities.