Ottawa Hires HSBC And TD To Manage $5 Billion Green Bond Sale

The federal government in Ottawa has hired HSBC Holdings and Toronto-Dominion Bank (TSX:TD) to manage its inaugural sale of green bonds.

The banks will advise on the design of Canada’s green bond framework, assist in the development of an ongoing program, and support the debut. Ottawa is aiming to raise $5 billion through the sale and joins other nations such as England and Germany in pursuing environmentally friendly debt issuance.

HSBC has previously been involved in arranging inaugural sovereign green bond sales for the United Kingdom, Poland, the Netherlands, Chile, South Korea and Hong Kong.

Sales of private sector environmentally friendly bonds in Canada so far this year reached $9.43 billion. That’s twice the amount sold in the comparable period a year earlier, and less than $100 million shy of the annual record reached in 2019.

Canada’s federal government hopes the green bonds can help it to deliver on its commitment to cut greenhouse gas emissions by 40% to 45% below 2005 levels by 2030.

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In May of this year, the federal government named Kathy Bardswick, a former chief executive officer of The Co-operators Group, as the inaugural chair of Canada’s Sustainable Finance Action Council, which aims to support the development of a sustainable finance market in Canada.

Canada Mortgage and Housing Corp.(CMHC) has said that it is assessing the potential for an environmental bond, and Telus Corp. (TSX:T), a longstanding issuer of Canadian dollar debt, has released a framework to potentially sell the country’s first sustainability-linked bonds.