In May of 2014, Regency Centers issued the first ever “Green Bond” for U.S. based Real Estate Investment Trust. The objective of pioneering a “Green Bond” issuance included:
- Further industry leading sustainability reputation among sustainability-conscious investors;
- Increase investor diversification and provide access to new sources of capital;
- Support growing market of sustainability-conscious investors, especially the fixed income segment;
- Net proceeds will be used to fund, in whole or in part, Eligible Green Projects (as defined in the prospectus supplement dated May 13, 2014) including the acquisition, construction, develop- ment and / or redevelopment of these projects.
Regency begain the process by collaborating with an external advisor on how best to define the Use of Proceeds for the green bond in manner that embraces the “Green Bond Principles”, minimizes risk and maximizes impact. It was decided that the Use of Proceeds would be used to fund, in whole or in part, Elgiible Green Projects, (as defined in the prosectus supplement dated May 13, 2014) including the acquisition, construction, development and / or redevelopment of projects been specific green criteria, such as those specificied in LEED Certification requirements. Prior to issuance Regency hosted a “Sustainability Update”, where the Vice President of Sustainability and the Vice President of Capital markets hosted one-on-one meeting with select investors to inform them of Regency’s sustainability strategy, progress on initiatives and accomplishments.
The Green Bond sale of $250 million was over subscribed achieved a 3.75% ten-year rate on senior unsecured notes. Pricing outcome was 15 basis points inside initial price target, and approximately 10 basis points inside higher rated real estate investment trusts.
“There is a growing market of environmentally conscious investors, and we found the Green Bond issuance was a good way to connect our commitment to sustainability with the socially responsible investing community while maintaining our overall goals and strategy” - Lisa Palmer, Chief Financial Officer