Allied Properties Real Estate Investment Trust has issued $600 million in debentures, representing its first offering under a newly introduced green financing framework. Proceeds from this and future green offerings will be applied to financing or refinancing four categories of assets — certified green buildings and data centres; projects supporting resource efficiency and management; clean transportation infrastructure; and renewable energy infrastructure — to be known as eligible green projects.
“Not only is this a meaningful step forward for our ESG (environmental, social, governance) program, the use of proceeds will improve our interest coverage ratio, extend the weighted average term of our debt and augment our pool of unencumbered investment properties,” observes Michael Emory, Allied REIT’s president and chief executive officer.
The offering, through a syndicate of agents led by Scotia Capital Inc., BMO Nesbitt Burns Inc. and CIBC World Markets Inc., is expected to close on or around Feb. 12, 2021. The debentures will bear interest at a rate of 1.726 per cent per annum and mature on Feb. 12, 2026.
Under its green financing framework, Allied commits to transparently report the allocation of all proceeds from green issuances along with ESG metrics for eligible green projects. The framework itself has validation from the independent ESG risk rating service, Sustainalytics, that it aligns with the International Capital Markets Association Green Bond Principles 2018 and the Loan Market Association Green Loan Principles 2020.
As of December 2020, Allied REIT held $9.4 billion in assets, encompassing 14 million square feet of gross leasable area in seven Canadian cities. It began reporting to the GRESB assessment of real estate portfolios’ ESG performance in 2020.