DASNY-issued bonds to fund green projects to help meet state’s environmental targets
State University of New York (SUNY) Chancellor John B. King, Jr. and Dormitory Authority of the State of New York (DASNY) President and CEO Reuben R. McDaniel 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 Gov. Kathy Hochul’s 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 and roofing improvements.
SUNY’s sustainability bonds will have a use of proceeds consistent with 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. These initiatives 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,” King said. “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 Gov. 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."
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.”
A press release stated, “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. The balance of the transaction 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 of 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. 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.
Founded in 1944, DASNY is New York state's capital project development authority. The press release explained DASNY “finances and constructs sustainable and resilient science, health and education institutions that help strengthen New York communities and create jobs. It is one of the largest issuers of tax-exempt bonds in the nation, enabling the State, local governments and certain nonprofit entities finance and build more cost effectively. DASNY also is a prolific public builder with a construction pipeline of more than 1,000 projects valued at approximately $9.3 billion as of March 31, 2023. More information on DASNY can be found here.
The State University of New York, which celebrates its 75th anniversary this year, is the largest comprehensive system of higher education in the U.S, and more than 95% of all New Yorkers live within 30 miles of any one of SUNY’s 64 colleges and universities. To learn more about how SUNY creates opportunities, visit suny.edu.