City of Toronto issues first debenture of the year to fund strategic capital projects

2023 April 19

The City of Toronto is reopening its debenture offerings for an additional $350 million conventional bond to help finance critical capital projects. This is the City’s first public debenture issuance this year.

This conventional bond issue, which is a reopening of a debenture originally issued in May 2022, has an all-in cost of 4.504 per cent, a coupon interest rate of 4.3 per cent, and a 30-year maturity. It will mature on June 1, 2052. This reissuance brings the bond’s outstanding amount to $715 million.

The proceeds from this issuance will be used to fund City Council-approved capital projects that are already completed, in process and committed from several City divisions and agencies, such as Corporate Real Estate Management, Long Term Care Home Services, Solid Waste Management Services, Transportation Services, Toronto & Region Conservation Authority, Toronto Public Library and the TTC. Some of the projects included in this issuance are building state-of-good-repair, bridge and road rehabilitation and workplace modernization.

Despite sustained concerns about inflation, investor confidence in the City and Toronto’s economy continues to be strong and demand for municipal bonds remains high. This issuance was very well-received and has a total of 42 Canadian and international investors.

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, previous 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 three years.

More information about the City’s debenture programs is available on the City’s Investor Relations webpage.