Canada-based communications technology company TELUS announced the closing of its inaugural Sustainability-Linked Bond issue, raising $750 million in an offering tying the interest on debt to the company’s performance against its climate goals.
According to TELUS, the sustainability-linked deal marked the first of its kind in Canada.
Sustainability linked securities are an emerging form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. Under TELUS’ recently released Sustainability Linked Bond Framework, the interest rate paid on the new bonds is linked to the company’s achievement of its emissions reduction targets. TELUS has committed to reducing its absolute Scope 1 and 2 greenhouse gas (GHG) emissions by 46% by 2030, relative to 2019 levels. If the company fails to achieve its target, the interest payable on the notes will increase by 1.00% per annum.
TELUS’ climate target has been approved by the Science Based Targets initiative’s (SBTi) as consistent with emissions reductions required to limit global warming to 1.5°C, the organization’s most stringent designation.
Darren Entwistle, TELUS President and CEO, said:
“Today, with the successful closing of our inaugural Sustainability-Linked Bond – the first of its kind in Canada – our team is at the forefront of sustainability practices, setting a leadership example in respect of leveraging behaviour-based financing to advance our sustainability goals.
“Importantly, our science-based, greenhouse gas emissions reduction target further validates our commitment to reduce our carbon footprint and care for the planet that our children will inherit. The successful completion of our Sustainability-Linked Bond reinforces our longstanding leadership in social capitalism, and our team’s dedication to exploring new and innovative ways to improve the lives of citizens around the world, today, and for generations to come.”
The 2.85% senior unsecured Sustainability-Linked Series CAF notes have a 10-year maturity. RBC Capital Markets acted as Lead Structuring Agent and Joint Bookrunner on the deal, with Scotiabank as Co-Structuring Agent and Joint Bookrunner, and BMO Capital Markets as Joint Bookrunner. Sustainalytics provided a second party opinion (SPO) on the framework, confirming alignment with the International Capital Market Association’s (ICMA) Sustainability-Linked Bond Principles, 2020.