(Bloomberg) -- Bank of Nova Scotia is debuting in the green bond market following other Canadian rivals including Royal Bank of Canada.
The Toronto-based lender is set to price $500 million of 3.5-year senior bail-in green bonds at a yield of 58 basis points over Treasuries, at the tight end of guidance earlier offered, according to people familiar with the matter. That compares with a spread of about 63 basis points the bank’s $1.25 billion of 2024 senior bail-in bonds were quoted at on Friday, according to Trace bid prices.
Scotiabank moved ahead with its first green offering a month after a panel of experts appointed by the Canadian government released a set of recommendations for bolstering the green and sustainable bond market, which include a set of tax incentives for investors and issuers as well as improving reporting requirements.
BNP Paribas (PA:BNPP) SA, ING Groep (AS:INGA) NV, JPMorgan Chase & Co (NYSE:JPM). are helping Scotiabank lead the transaction. Earlier this year, RBC sold 500 million euros of five-year senior bail-in green bonds. In 2014, Toronto Dominion Bank became the first Canadian bank to tap the green market when it priced C$500 million of three-year bonds.
Scotiabank will apply proceeds from today’s sale toward assets, businesses or projects involved in initiatives such as pollution control or green buildings, according to the issuance framework it released last month.
Borrowers so far this year have priced a record $104.4 billion of global green bonds, compared with $70.3 billion in the same period a year earlier, according to data compiled by Bloomberg.
(Updates with pricing information and use of bond sale proceeds)
