Climate bond deal lands New York's MTA an international award

Register now

New York’s Metropolitan Transportation Authority received an international award for leadership in green bond finance.

Climate Bonds Initiative cited the MTA for the largest certified climate bond Tuesday at its third annual Green Bond Pioneer Awards ceremony in London.

The advocacy group recognized organizations, financial institutions and government bodies and individuals who have led the development of green finance and green bond markets in the past year.

On Sept. 19, Citigroup priced the New York Metropolitan Transportation Authority’s $662 million issuance of Series 2017B climate bond certified transportation revenue refunding green bonds, which included a retail component. Officials upsized the sale from $500 million.

“The MTA is encouraged to see a strengthening market for climate bonds,” said authority Chairman Joe Lhota. “Receiving recognition by the Climate Bonds Initiative for providing 9 million customers a day with efficient, low-carbon transportation acknowledges the MTA's successful efforts in being a leader in reducing greenhouse gases.”

The issue was priced to yield from 1.25% with 4% and 5% coupons in a split 2021 maturity to 2.41% with a 5% coupon in 2028.

“The green bond designation definitely broadens the buyer base,” a trader said the day of the sale.

The MTA, a state-run authority that operates New York City’s subways and buses, two commuter rail lines and several intraborough bridges and tunnels, is one of the largest U.S. municipal issuers with roughly $38 billion of debt.

Massachusetts in 2013 became the first state to sell green bonds, modeling them after the World Bank's sale in 2008. Several states have since followed suit.

Among the multitude of mostly international winners was Fannie Mae, for the largest overall issuer to a trillion market.

For reprint and licensing requests for this article, click here.
Green bonds Infrastructure Joseph Lhota Metropolitan Transportation Authority New York