Telus Corp. has sold Canada’s first "sustainability-linked bonds," that can be used broadly and not just for environmental purposes.
The telecom company sold $750 million of the bonds maturing in November 2031 up from at least $500 million initially offered. The securities were priced at a yield of 137 basis points over Canadian government securities, and garnered orders for more than 3.5 times the deal size.
Telus went ahead with the transaction at a time when the company is bidding in an auction for 3,500-MHz spectrum. The proceeds of sustainability-linked bonds, or "SLBs," can be used for general funding plans by a variety of companies, including those in energy and mining, which may otherwise find it difficult to issue green bonds.
Telus plans to use the net proceeds of the offering for the repayment of outstanding debt among other general corporate purposes. The bonds will have a potential interest step-up in November 2030 should it fail to meet a goal related to the reduction of its greenhouse gas emissions.
Telus may be followed by Enbridge, which last week released the first framework for the issuance of sustainability-linked bonds from a North American pipeline company.