Desjardins Group enters the sustainable bond market

Desjardins Group has, for the first time, issued $500 million in sustainable bonds in the Canadian market.

The cooperative financial group, which has developed a sustainable bond framework, said in a Thursday release that this initial issuance is “part of a broader program that should lead Desjardins to solicit the sustainable bond market on a number of occasions in the next few years.”

The issuance is scheduled to close on Sept. 10 and involves sustainable bonds issued by the Fédération des caisses Desjardins du Québec. The bonds will come in the form of senior notes, bearing interest at a fixed rate of 1.587% and due September 10, 2026, the release said.

Desjardins Securities and HSBC Securities (Canada) are both acting as joint bookrunners and structuring agents, and Scotia Capital is also acting as a joint bookrunner.

Net proceeds from this issuance will be earmarked for loans, investments and projects tagged as green or socially responsible. Possible areas of investment include renewable energy, sustainable food production and affordable housing, among others.

Examples of exclusionary criteria include any businesses with principal activity tied to traditionally harmful areas such as tobacco, thermal coal and predatory lending.

“By championing green, responsible products and services and issuing sustainable bonds, we hope to have a positive influence on our members and clients and lead the way to an economy that produces fewer and fewer carbon emissions, which will benefit society as a whole,” said Desjardins president and CEO Guy Cormier, in the release.

Other green bond activity within the past few months has come from institutions such as Royal Bank of Canada and Bank of Nova Scotia, and the federal Department of Finance has discussed the issuance of green bonds and social bonds.

Staff

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