SUNY's Green Bond Supports Climate, Social Change
In an exciting announcement, Chancellor John B. King, Jr. of the State University of New York (SUNY) and Reuben R. McDaniel, President and Chief Executive Officer of the Dormitory Authority of the State of New York (DASNY), unveiled a groundbreaking development - DASNY's inaugural issuance of sustainability bonds on behalf of SUNY to bolster its residence hall programme.
DASNY has successfully issued approximately $113 million in SUNY Dormitory Facilities Revenue Bonds, specifically designated for sustainability initiatives.
The proceeds from these sustainability bonds will fuel projects aimed at helping SUNY fulfill Governor Kathy Hochul's ambitious environmental objectives.
These projects are mandated to adhere to the stringent NYStretch Energy Code – 2020 and encompass the construction and revitalisation of dormitory facilities across various SUNY campuses, all in alignment with sustainability bond criteria. The expenditures will encompass a wide spectrum, including electrical enhancements, HVAC upgrades, roofing improvements, and more.
SUNY's commitment to sustainability through these bonds is in keeping with their Directive 1B-2, which defines goals for achieving Net Zero Carbon in new buildings, conducting deep energy retrofits of existing structures, and implementing partial building renovations or system/component replacements to advance SUNY's Clean Energy and Sustainability ambitions, as well as New York State's Climate Leadership and Community Protection Act (CLCPA).
SUNY Chancellor King emphasised the institution's dedication to leading the way in environmental stewardship, given its substantial representation of 40% of all state-owned buildings in New York.
He commended the success of the initial sustainability bond release, which exceeded expectations by garnering more offers to buy than bonds available for sale.
The $113 million raised through these bonds will empower SUNY to construct highly efficient residence halls and retrofit existing ones to meet Governor Hochul's bold state climate objectives, all in accordance with the bond guidelines. Chancellor King extended gratitude to DASNY for their support in advancing SUNY's sustainability goals.
President & CEO McDaniel of DASNY expressed pride in partnering with SUNY, one of their major clients, in incorporating sustainability into their capital planning. He noted that DASNY's finance and construction experts bring unparalleled expertise to assist clients in achieving their financial, construction, and sustainability goals.
The sustainability designation for these bonds was conferred by Kestrel, an accredited verifier approved by the Climate Bonds Initiative.
Kestrel meticulously reviews and analyses financings for their ESG (environmental, social, and governance) benefits. Their second-party opinion confirms alignment with the International Capital Market Association Sustainability Bond Guidelines.
These bonds will finance projects in line with green and social bond principles. The SUNY Dormitory Facilities sustainability bonds are part of a larger bond transaction totalling approximately $350 million. The remaining portion of the transaction involves the tender of bonds, providing over $36 million in debt service savings for the residence hall programme. Siebert Williams Shank, an MWBE firm, takes the lead as bookrunner for the transaction, with Bank of America serving as the co-lead manager.
Monica Reid, CEO of Kestrel, lauded the highly impactful Residence Hall Programme, emphasising its alignment with net-zero goals and its contribution to accessible and affordable student housing across the state.
Suzanne Shank, President and CEO of Siebert Williams Shank, expressed gratitude to SUNY for entrusting them with a role in their historic foray into the sustainability bond market, a testament to SUNY's unwavering dedication to environmental and social progress.
John Lawlor, head of municipal banking and markets at Bank of America, commended the collaborative efforts of SUNY, DASNY, and their team in achieving debt service savings through strategic bond tendering. He hailed this achievement as a demonstration of their collective commitment to enhancing the financial well-being of SUNY's Residence Hall programme.
SUNY's residential hall programme encompasses 450 dormitories across 25 state-operated campuses, accommodating approximately 61,000 students annually.
SUNY and its colleges and universities are resolutely committed to sustainability, actively offering programmes in renewable energy, sustainability, and climate science to discover climate solutions, alter environmental behaviours, and contribute to a greener society. Additionally, they are dedicated to combating climate change by reducing energy consumption and curbing pollution and carbon emissions into the atmosphere.
SUNY and DASNY are planning periodic issuances of sustainability bonds in line with the International Capital Markets Association Sustainability Bond Guidelines, with proceeds consistently aligned with select United Nations Sustainable Development Goals.
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Source: SUNY
