DASNY-issued Bonds to Fund Green Projects to Help Meet
New York State’s Environmental Targets
Albany, NY – State University of New York (SUNY) Chancellor John B. King, Jr. and Dormitory Authority of the State of New York (DASNY) President and Chief Executive Officer Reuben R. McDaniel today announced DASNY’s first-ever issuance of sustainability bonds on behalf of SUNY to support its residence hall program.
DASNY issued approximately $113 million SUNY Dormitory Facilities Revenue Bonds with a sustainability designation.
Proceeds from the sustainability bonds will be used to develop projects to help SUNY meet Governor Kathy Hochul’s ambitious environmental goals. All SUNY projects are required to comply with the NYStretch Energy Code – 2020. Projects will include the construction and rehabilitation of dormitory facilities on various SUNY campuses aligned with sustainability bond guidelines. Expenditures include electrical projects, HVAC upgrades, roofing improvements, and more.
SUNY’s sustainability bonds will have a use of proceeds consistent with their Directive 1B-2 which, in part, defines and identifies goals for Net Zero Carbon new buildings, deep energy retrofits of existing buildings and partial building renovations or system/component replacements to advance SUNY’s Clean Energy and Sustainability goals and New York State’s Climate Leadership and Community Protection Act (CLCPA).
“Given that SUNY represents 40% of all state-owned buildings in New York, we must lead the way in researching new measures and implementing proven ones to minimize our environmental impact,” said SUNY Chancellor King. “The initial release of sustainability bonds was a huge success, surpassing expectations and receiving more offers to buy than there were bonds available to sell. The $113 million raised from the bonds will allow SUNY to construct new, high-efficiency residence halls, and retrofit existing halls to achieve Governor Hochul's ambitious state climate goals, which also align with the bond guidelines. I would like to thank our partners at DASNY for supporting SUNY's sustainability goals."
President & CEO McDaniel said, “DASNY is proud to partner with SUNY, one of our largest clients in their work to incorporate sustainability into their capital planning. Our finance and construction professionals bring unmatched expertise in helping our clients achieve their finance, construction and sustainability goals.”
The sustainability designation was provided by Kestrel, an approved verifier accredited by the Climate Bonds Initiative that reviews and analyzes financings for their ESG (environmental, social, and governance) benefits. Kestrel’s Second Party Opinion confirms alignment with the International Capital Market Association Sustainability Bond Guidelines. Sustainability bonds finance projects that conform with green and social bond principles. These SUNY Dormitory Facilities sustainability bonds are part of a larger approximately $350 million bond transaction. The balance of the transaction represents the tender of bonds which will provide over $36 million in debt service savings for the residence hall program. Siebert Williams Shank, an MWBE firm, is the lead bookrunner for the transaction and Bank of America is the co-lead manager.
Monica Reid, CEO of Kestrel, said, “The Residence Hall Program is highly impactful. The Program is net zero aligned and supports access to affordable student housing across the state.”
Suzanne Shank, President and CEO, Siebert Williams Shank, said, “We extend our sincere gratitude to SUNY for entrusting us to be a part of their historic debut into the sustainability bond market, a testament to their dedication to environmental and social progress."
John Lawlor, head of municipal banking and markets at Bank of America, said "SUNY, DASNY, and our team have worked collaboratively to achieve debt service savings through a strategic tender of bonds,” said. “This accomplishment exemplifies our united commitment to enhancing the financial well-being of SUNY’s Residence Hall program."
SUNY’s residential hall program includes 450 dorms on 25 state-operated campuses for about 61,000 students each year.
SUNY and its colleges and universities are dedicated to sustainability, taking active steps towards not only offering programs in renewable energy, sustainability, and climate science to discover climate solutions, change environmental behaviors, and contribute to a greener society, but also to combatting the effects of climate change through lowering energy use and limiting the amount of pollution and carbon gasses released into the atmosphere.
SUNY is planning with DASNY to periodically issue sustainability bonds, which are aligned with the International Capital Markets Association Sustainability Bond Guidelines and will also have a use of proceeds consistent with certain of the United Nations Sustainable Development Goals.