Metro advances sustainability and climate change solution with new bonds to modernize the transit system

Metro is advancing its mission to be part of the region’s solution on sustainability and climate change by selling bonds that, for the first time, have secured a Sustainability-Climate Transition designation, meaning they will be used to fund projects with environmental benefits and also contribute a positive social benefit.

Issuing bonds is an important part of Metro’s strategy to maintain a predictable revenue stream to plan for long-term capital projects that modernize the system and keep it safe and reliable for generations to come. The Sustainability – Climate Transition Bonds designation is issued by the International Capital Market Association (ICMA).

The $797,800,000 bond sale, which settled August 17, will fund capital projects across Metro’s approved FY24 Capital Improvement Plan, including but not limited to: bus garage rehab and replacements, bus fleet replacement & zero emission bus transition, automatic train control equipment upgrades, traction power upgrades, work on Metro’s existing fleet of trains and its next generation of railcars, and rail station LED lighting improvements.

"Choosing Metro has always been one of the most beneficial choices you can make for sustainability and the environment, and these new bonds further solidify Metro as a leader in sustainability for the region and an attractive investment for the bond market,” said Metro General Manager and CEO Randy Clarke.

“Metro's capital program is delivering large-scale projects to modernize our system on time and on budget, and these bonds will help us continue to improve our system," said Metro Board Finance and Capital Committee Chair Matt Letourneau. "Metro not only connects our region, but also reduces emissions and improves the environment, which allowed us to secure the Sustainability-Climate Transition designation for these bonds."

Metro’s biggest sustainability impact for the region is in the service it provides - efficient, low-carbon transportation that allows many in the region to have low-or no-car households. In 2022, Metro customers travelled 760,000,000 miles on bus and rail, reducing tailpipe emissions by 240,000 metric tons if those miles would have otherwise been traveled by car.

Sustainability–Climate Transition Bonds require that bond proceeds are used exclusively to fund projects with environmental and social benefits – and Metro’s entire capital program qualifies. The ICMA has established standards for determining project eligibility, tracking bond proceeds and reporting on project impact. Metro worked with BLX Group LLC, an independent municipal consulting and compliance advisory firm, for rigorous verification of Sustainability-Climate Transition bond designation eligibility.

Issuing these bonds alignwith Metro’s continuing commitment to sustainability. As outlined in its Strategic Transformation Plan, Metro's mission of "connecting you to possibilities" and its vision of being the "region's trusted way to move more people safely and sustainably" align with ICMA's Sustainability Bond Principles. For example, this year Metro advanced equitable access to transit by capping MetroAccess fares at $4 and establishing MetroLift program for low-income households. And Metro’s plan to transition its bus fleet to 100 percent zero-emission by 2042 supports ICMA’s Climate Transition Bond Principles by advancing low-carbon transportation to achieve the 2-degree Celsius warming limit established by the Paris Climate Agreement.