City of Toronto’s second debenture of the year issued to fund strategic capital projects

2023 June 22

Yesterday, the City of Toronto issued its debenture for $335 million to help finance key capital projects. This is the City’s second public debenture issuance this year.

This conventional bond issue has an all-in cost of 4.329 per cent, a coupon interest rate of 4.25 per cent, and a 10-year maturity of July 11, 2033.

The proceeds from this issuance will fund Council-approved capital projects from several City divisions and agencies such as Economic Development & Culture, Corporate Real Estate Management, Environment and Climate, Shelter Support & Housing Administration, Toronto Public Library and Transportation Services. Some projects included in this issuance are: state-of-good repair, traffic congestion management, building renovations and bridge rehabilitation.

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 had a total of 38 Canadian and international investors.

Toronto has one of the most extensive municipal borrowing programs in Canada. It is a regular public Canadian debt market issuer, with several sinking fund debentures yearly. 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.