The process whereby the Ontario government will issue green bonds moved a step further Monday when the province filed a prospectus supplement with the Securities & Exchange Commission.
But, as was to be expected, there was no information about when the province will issue such securities and the interest rate it will have to pay. Such information will be published when the bonds, which will be invested in so-called eligible projects, are issued. According to the supplement, eligible projects “means all projects funded by the province that have environmental benefits, exclusive of fossil fuel and nuclear energy projects, as determined by the Province of Ontario.”
The supplement then lists five types of such projects: clean transportation; energy efficiency and conservation; clean energy and technology; forestry, agriculture and land management and climate adaptation and resilience.
The supplement noted that the proceeds from the issue “are expected to be used to fund some or all of such types of eligible projects.”
However, once the bonds are issued, the proceeds will be paid into the province’s consolidated revenue fund “and will not be held in a segregated account.” But plans call for an amount equal to the net proceeds “will be recorded in a designated account in the province’s financial records,” and this designated account will be used to track the use of and allocation of funds to eligible projects.
The province announced plans for its inaugural deal about 10 days back. The expectation is that it will issue $500-million of such securities through the same syndicate that sells regular bonds under its domestic benchmark medium term note program.
The supplement noted that the province has made application to list the bonds on the Luxembourg Stock Exchange. Plans call for the bonds to be offered for sale in Canada, U.S., Europe and Asia.
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