California Green Muni Bond Issuances Top $1.6 Billion

Port of Los Angeles, Midpeninsula Open Space Issuances in September

California government agencies are continuing to expand their green bond issuances.   Two recent bonds pushed the California green muni bond total to over $1.6 billion (see chart below).

The Port of Los Angeles issued $35.2 million in green bonds as part of a larger debt refinancing successfully completed recently. The move marks the first time a U.S. port has entered the growing sustainability bond market where investors support projects and companies making positive social and environmental change.

 The Port’s green bonds underwent an independent review to ensure the transaction conforms to international social and sustainability principles. Sustainalytics, a global leader in sustainability research and analysis whose clients include Apple Inc. and Starbucks Corp., performed the third-party evaluation. The firm validated the integrity of the Port’s green bonds for three projects completed in recent years:

• The Wilmington Waterfront Park: a 30-acre green space with walkways, bike paths and a children’s playground that also serves to buffer the community from Port traffic.

• The Port of Los Angeles Police Headquarters: The structure’s environmental and energy-efficient features earned gold-level certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED).

• The Cabrillo Shallow Water Habitat: a 190-acre feeding area for fish and marine birds.

The Midpeninsula Regional Open Space District (Midpen) issued $54,490,000 in tax-exempt and $2,920,000 in taxable green bonds.  Midpen operates in the Silicon Valley region.  The new green bonds will refinance debt original used to acquire an 7,366 acres of open space within the District in the following preserves: Bear Creek Redwoods, El Corte de Madera Creek, El Sereno, Long Ridge, Miramontes Ridge, Monte Bello, Pulgas Ridge, Purisima Creek Redwoods, Russian Ridge, Saratoga Gap, Sierra Azul, Skyline Ridge, Tunitas Creek, Thornewood, and Windy Hill.

“We felt the ‘green’ designation perfectly reflects our mission to acquire, preserve and protect a greenbelt of open space, and to specifically target the growing sustainable and socially responsible investing movement,” said Stefan Jaskulak, Midpen Financial Officer. 

Midpen reports that the financing was well received in the market, generating orders of up to $150 million from both retail and institutional buyers nationwide. In a first, Midpen tapped into the local retail market, selling nearly $8 million to residents of San Mateo and Santa Clara counties, individual investors who may already be familiar with the district’s operations and work. 

“It was wonderful to see so many local residents directly investing in Midpen, many of who are constituents and active users of our open spaces,” said Yoriko Kishimoto, Midpen Board President. 

On August 18, 2016, the district received AAA credit ratings from both Fitch Ratings and Standard and Poor’s, the highest ratings available for financial performance. 

“This was a very exciting and successful effort for Midpen,” said Steve Abbors, Midpen General Manager, “We’re saving the public $15.7 million in future payments, paying bonds off three years early, and giving local residents a ‘green’ way to invest in their open space.”

California Green Muni Bond Issuances
Issuer	Date	Amount	General Purposes
State of California	10/7/2014	$300,000,000	Mass Transit, Clean Water, Energy Efficiency
San Francisco Public Utilities Commission	5/20/2015	$32,025,000	Renewable Energy
City of Los Angeles	6/4/2015	$188,755,000	Wastewater, Digester, Water Purification
East Bay Municipal Utility District	6/17/2015	$74,335,000	Clean Drinking Water, Conservation, Flood Protection, Renewable Energy, Biodiversity
City of Los Angeles	6/30/2015	$100,835,000	Wastewater, Water Purification, Digester
San Diego Unified School District	1/5/2016	$100,000,000	Energy Efficient Buildings, Renewable Energy
IBank	4/28/2016	$410,735,000	Clean Water, Water Pollution Control
San Francisco Public Utilities Commission	5/10/2016	$240,000,000	Clean water, wastewater
San Diego County Water Authority	6/23/2016	$98,945,000	Water Efficiency
Midpeninsula Open Space District	9/8/2016	$57,410,000	Open Space Acquisition, related
Port of Los Angeles	9/14/2016	$35,200,000	Open space, habitat, green building
Total		$1,638,240,000	(prepared by Michael Paparian 9/19/16)