BNY Mellon has been appointed trustee, paying agent and bond registrar for approximately $18.5 million in green bonds by the Vermont Educational and Health Buildings Financing Agency (VEHBFA) and Saint Michael’s College. The bonds, described as the first green bonds issued by a Vermont higher education institution, will finance the construction of a three-story 188-bed residence hall for students at the college, which is located near Burlington, VT.
The bonds, which will be backed by tuition and other student fees, have been designated green bonds because the new residence hall is being designed to use less energy. The new residence hall will replace older dorms which are more expensive to maintain and located further from the main campus. The new hall also will incorporate sustainable building practices.
Said Neal Robinson, vice president for finance of Saint Michael’s College: “BNY Mellon has provided excellent support on our previous bond issues and has a strong track record in supporting green bond issues. Green bonds are attractive to investors seeking to support projects designed to limit the impact of climate change, while obtaining competitive returns. Promoting environmental sustainability is an important goal of Saint Michael’s College.”
“Green bonds continue to gain momentum as issuers and investors see their importance in confronting climate change,” said Antonio Portuondo, head of BNY Mellon Corporate Trust’s public and not-for-profit business.” In addition to appealing to retail investors seeking more sustainable investments in their portfolios, green bonds benefit institutional investors addressing environment, social and governance mandates (ESG) mandates. This had been a challenge for fixed income investors prior to the emergence of green bonds.”
Among the technologically advanced aspects of the Saint Michael’s project is the construction of 30 geothermal wells that will be dug to a depth of 500 feet that will heat, cool and provide water to the residence hall. It will use one boiler, which will be used to provide backup energy. This compares to a conventionally designed structure that would use four fossil-fuel burning boilers, creating a much larger carbon footprint.