Telus sells first SLB number in Canada in 5G battle

(Bloomberg) – Telus Corp. assessed the first Canadian sustainability bonds, a sort of debt sale whose proceeds can be used widely and not just for environmental purposes.

The telecommunications company sold C $ 750 million ($ 606 million) of bonds maturing in November 2031, against at least C $ 500 million initially offered, according to people familiar with the matter. The securities were valued at a return of 137 basis points against Canadian government securities, at the end of a spread forecast released to investors earlier on Monday, and have garnered orders for more than 3.5 times the size of the deal, people said.

Telus completed the transaction at a time when the Vancouver-based telecommunications company is bidding on an auction for 3,500 MHz spectrum. The product of sustainability bonds, or SLBs, can be used for general corporate finance plans so that it can suit a wider range of businesses, including industries such as energy and mining, who may have more difficulty issuing green bonds.

Telus intends to use the net proceeds of the offering to repay outstanding debt, among other general corporate objectives. The company is moving forward with the deal after company executives, including CFO Doug French, had calls with investors on June 15 and 16.

The notes will have the potential for increased interest in November 2030 if it fails to meet a target related to reducing its greenhouse gas emissions. More than 70 investors participated in the transaction, according to people familiar with the matter.

The telecommunications company could be followed by Enbridge Inc. which last week released the first framework for the sustainability bond issue of a North American pipeline company. The Calgary-based business may consider a US dollar transaction first.

A Telus press secretary did not provide immediate comment.

(Add the number of investors in the deal to the fifth paragraph. An earlier version of this story corrected the city where Telus is headquartered.)

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