Allied Announces $450M Green Bond Offering to Refinance Debt and Fund Sustainable Projects
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- $450M Green Bond Issuance: Allied Properties REIT launches Series K senior unsecured debentures at 4.808% interest, maturing in 2029.
- Sustainability Commitment: Proceeds will finance/refinance Eligible Green Projects, including repaying the 19 Duncan construction loan and maturing debt.
- Financial Strength: Move reduces variable-rate debt and increases unencumbered properties to 87%.
Allied Properties Real Estate Investment Trust announced a $450 million green bond offering on a private placement basis across Canada. The debentures, issued under Allied’s Green Financing Framework, will bear 4.808% interest per annum and mature on February 24, 2029.
Funding Green Projects
Allied intends to allocate the net proceeds to finance or refinance Eligible Green Projects. Initially, funds will repay the $250M construction loan for 19 Duncan Street, Toronto, with the remainder applied to $200M in Series C unsecured debentures due April 21, 2025.
“19 Duncan is designed to achieve LEED Gold certification,” Allied stated, highlighting its commitment to sustainability.
Financial Strategy
The offering aligns with Allied’s deleveraging strategy, minimizing variable-rate debt and extending debt maturity. It also boosts the pool of unencumbered properties from 83% to 87%.
Related Article: Qatar Launches Green Bonds Trading on London Stock Exchange
Market Response
The debentures, sold at par, are co-led by Scotiabank, RBC Capital Markets, and CIBC Capital Markets, with participation from BMO Capital Markets and TD Securities. Subject to customary closing conditions, the deal is expected to close on February 24, 2025.
The securities have received a BBB rating with a Negative trend from Morningstar DBRS and rank equally with Allied’s other unsecured debts.
Although Allied intends to allocate the funds as outlined, failure to do so will not constitute an Event of Default under the Series K Indenture.
Legal Note:
The debentures have not been registered under the U.S. Securities Act of 1933 and are not for sale in the United States.
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