Boston Properties Issues Third Green Bond as ESG Interest Skyrockets
Issuers are realizing financial benefits from green bond offerings, with many seeing pricing increases of up to 20 basis points.
REIT Boston Properties has issued its third green bond, pricing the offering at $850 million and announcing the redemption of all outstanding shares of its 5.25% Series B preferred stock.
Boston Properties will issue the bond through 2.550% senior unsecured notes due in 2032 in an underwritten public offering through BofA Securities, Deutsche Bank Securities, J.P. Morgan Securities, Morgan Stanley & Co. and TD Securities (USA) as joint book-running managers. The notes were priced at 99.570% of the principal amount to yield 2.595% to maturity.
This most recent green bond offering follows Boston Properties’ initial $1 billion green bond in November 2018 and a second one worth $850 million in June 2019. The funds from this 11-year bond offering will be used to repay a $500 million delayed draw term loan facility and other eligible green projects. The offering is expected to close March 16.
Investor interest in ESG has skyrocketed over the last year, with private equity becoming increasingly focused on the sector. At the same time, issuers are realizing financial benefits from the offerings, with many seeing pricing increases of up to 20 basis points, according to a recent JD Supra analysis, for ESG investment strategies.
“The US’ adoption of sustainable finance has become a force to be reckoned with in the capital markets,” Arthur Krebbers, head of sustainable finance for NatWest, told Nasdaq. “We think the Biden administration will see that trend accelerate because you’re going to start seeing more regulatory and institutional support similar to what we’ve seen in the European market.”
Boston currently owns and manages 28.8 million square feet of green building projects, 96% of which have been certified as either LEED Gold or Platinum. In a statement, the company said it has implemented energy conservation projects and other measures in actively managed office buildings that have reduced site energy use intensity by 27% and greenhouse gas emissions intensity by 70%.