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Green Bond Investor Presentation
South Coast British Columbia Transportation Authority (TransLink)
November 2018
Metro Vancouver Economy
TransLink Overview
Green Bond Framework
Eligible Green Projects – 2018 Issuance
Green Bond Issuance
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6 Why TransLink
Contents
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Fastest growing metro area in Canada Asia Pacific Gateway: Port of Vancouver, largest in Canada,
3rd largest in North America, facilitating trade with more than 170 world economies
YVR – 2nd busiest in Canada served by 56 different airlines
One of the world’s most liveable regions
1 Metro Vancouver Economy
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TransLink was created through provincial legislation in 1999. We are responsible for planning, financing and managing public transit, in addition to regional roads and bridges
RoadsOperation and maintenance of the 2,370 lane km of the Major Road Network
BridgesPattullo, Knight Street, Golden Ears, and Westham Island bridges; as well as the Canada Line bike and pedestrian bridge
Transit Police ForceDedicated transit police service with more than 180 officers
Commuter Rail Service (West Coast Express)Eight stations along 69 km between downtown Vancouver and Mission
Bus ServicesMore than 220 bus routes with a fleet of over 1,600 vehicles
Rapid Transit Services (SkyTrain)79 km of rapid transit and 53 stations on the Expo, Millennium, and Canada lines
Ferry Services (SeaBus)Three passenger-only ferries linking downtown Vancouver and North Vancouver
Cycling12 km of bike paths, five bike parkades, and more than 400 bike lockers, as well as cycling projects
HandyDARTOn-demand transit service for people with disabilities, with more than 320 HandyDART vehicles in our fleet
2 TransLink Overview
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Our service area spans more than 1,800 km2, with 2.5 million residents in Metro Vancouver
2 TransLink Overview – Transit Network
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Transit Fares: $585.2 million (29.8%)TransLink collects revenue directly from the Metro Vancouver residents using the system
TransLink has a diverse set of revenue sources: ≈ $2 billion (2018 Budgeted)
Power Levy: $21.3 million (1.1%)A levy to every residential dwelling in Metro Vancouver. The power levy is added to the dwelling’s power bill and collected by BC Hydro on behalf of TransLink
Fuel Taxes: $388.4 million (19.8%)Purchasers of gasoline and diesel fuel sold within Metro Vancouver must pay a provincial tax, a portion of which goes to TransLink
Parking Tax: $71.5 million (3.6%)TransLink has the authority to charge a tax on the purchase price of a parking space
Advertising: $13.1 million (0.7%)Property Rentals: $3.5 million (0.2%)Other Misc. Transit Revenue: $5.0 million (0.3%)
Senior Government Funding for Capital: $347.0 million
Provincial Contribution for Canada Line: $19.2 million
GEB Toll Replacement Revenue: $57.9 million
Investment Income: $48.2 million
Amortization of Deferred Concessionaire Credit: $23.3 million
Adjacent Integrated Development (AID) Revenue: $2.0 million
Miscellaneous: $3.6 million
Taxation Revenue: $855.1 million (43.6%) Transit Revenue: $606.8 million (30.9%)
Other Revenue: $501.2 million (25.5%)
Property Taxes: $373.9 million (19.0%)TransLink assesses property tax on the net taxable value of land and improvements within the 21 municipalities and rural areas within Metro Vancouver
2 TransLink Overview – Diverse Revenue Sources
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$7.2 billion in new transportation investments (capital and operating*)
2 TransLink Overview – 2018-2027 Investment Plan: New Funding
6*Does not include financing costs ** Requires provincial legislation
Property tax increase of $5.50 per year for
average homeowner
Increase to regional development cost charge (DCC)**
Additional gradual, annual increases to
transit fares
Federal Government$2 billion
Provincial Government$2.7 billion
Metro Vancouver Region $2.5 billion*
~3% increase to the parking sales tax(from 21% to 24%
rate)**
NEW funding included in regional share:
P
$2.4 billion capital &$30 million/yr in operating capacity
2 TransLink Overview – 2018-2027 Investment Plan: Capital Plan
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Major Capital Project CategoriesGross Capital Cash
Flow($ millions)
Snr. Gov't Funding
($ millions)
Amount Borrowed in Plan
($ millions)
South of Fraser Rapid Transit 1,650 (840) 811
Broadway Subway 2,810 (2,810) -
Expo & Millennium Line Upgrades (New in this Plan) 1,301 (1,136) 165
Bus Vehicles 1,903 (1,696) 207
Rail Vehicles 465 (215) 250
Bus Other (Equipment, Facilities & Infrastructure) 672 (199) 473
Rail Other (Equipment, Facilities & Infrastructure) 810 (289) 521 Corporate (Technology, Infrastructure, Facilities & Transit Police Vehicles) 302 (196) 106
Major Road Network 519 - 519
Bridges 36 - 36
Bike, Cycling and Walking 33 - 33
TOTAL 10,500 (7,380) 3,120
-
500
1,000
1,500
2,000
2,500
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
$ M
illio
nsOperating Expenditures Interest Expense
Principal Payments Net Capital Cash Flows
Revenues (exluding funding for capital) Cumulative Cash Reserves
2 TransLink Overview – 2018-2027 Investment Plan: Cash Flow Projections
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Legislation requires the preparation of detailed transportation and financial plans
Our Investment Plan,Covering 10 Years Key Provisions
Borrowing Limit
Balanced BudgetProvision
Mayors’ Council Approval
Debt Service Safeguard
2 TransLink Overview – Legislated Safeguards
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Moody’s October 2018 – Aa2 Stable“The credit profile of the South Coast British Columbia Transportation Authority ("TransLink") (Aa2 stable) reflects its strong market position as the main provider of transportation services in the Greater Vancouver region, robust ridership supported by a growing population and continued positive operating results. TransLink’s unique status as a taxing authority also allows it to sustain a higher debt burden than other public mass transit enterprises at the same rating level."
DBRS October 2018 – AA Stable; Short-term R-1 (middle)“The ratings are supported by TransLink’s taxing authority in the Metro Vancouver Regional District (Metro Vancouver), sound financial management, and strong regional economic growth dynamics that are driving increased ridership. TransLink’s operating performance remains positive and its robust long-term planning provides DBRS with confidence that the credit profile remains sound amid a major expansion of transit services and infrastructure."
2 TransLink Overview – Credit Ratings
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TransLink intends to issue Green Bonds under its recently developed Green Bond Framework.
TransLink’s Green Bond proceeds will be exclusively applied to projects with environmental benefits.
Green Bonds will rank pari passu with TransLink’s other bonds and are payable without any preference or priority.
TransLink is committed to Green Bond issuance in the future, whether through new bonds or reopenings.
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TransLink Overview – TransLink’s Inaugural Green Bond
TransLink has adopted a Sustainability Policy to foster development of a sustainable transportation system that aims to meet the needs of people, organizations and businesses, as well as promote the ecological, economic, and social well-being of the Metro Vancouver region and beyond.
We integrate sustainability reporting into our annual Accountability Report - bringing together financial performance, people practices, and sustainability –to better reflect our comprehensive performance strategy, and how we make decisions based on an integration of factors.
TransLink is one of only five transit agencies in North America recognized as a Platinum Level signatory of the American Public Transportation Association’s Sustainability Commitment
TransLink was recognized as one of Canada’s Greenest Employers for 2018
2 TransLink Overview – Commitment to Sustainability
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Target 180% reduction of greenhouse gas emissions by 2050
Target 2Utilize 100% renewable energy in all operations by 2050
2 TransLink Overview – Sustainability Targets
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TransLink’s second-party opinion provider, Sustainalytics, is of the opinion that the TransLink Green Bond Framework is credible and impactful, and aligns with the Green Bond Principles, 2018.
3 Green Bond Framework – Overview
Project Categories SDG Targets
Clean Transportation Affordable and Clean Energy: 7.2Sustainable Cities and Communities: 11.2, 11.3
Renewable Energy Affordable and Clean Energy: 7.1. 7.2Sustainable Cities and Communities: 11.3Climate Action: 13.1
Energy Efficiency Affordable and Clean Energy: 7.1, 7.2
Green Buildings Sustainable Cities and Communities: 11.2, 11.3
Climate Change Adaptation
Climate Action: 13.1, 13.2, 13.3
Pollution Prevention and Control
Clean Water and Sanitation: 6.3Sustainable Cities and Communities: 11.6
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TransLink’s Green Bond Framework and Sustainanalytics’ Second-Party Opinion can be found at TransLink Investor Relations:
www.translink.ca/About-Us/Investor-Relations.aspx
The selection of the eligible projects is the responsibility of the Corporate Finance Department which includes Corporate Sustainability, Treasury and Capital Assets. Other relevant business units will be consulted during the process.
Net proceeds from each Green Bond will be deposited in a separate TransLink Green Bond Proceeds designated bank account and recorded separately in TransLink’s records and books of account in order to clearly track the use of and allocation of funds for Eligible Projects.
TransLink’s Corporate Finance Department will coordinate the collective reporting requirements and, as long as there are outstanding Green Bonds issued under this Framework, provide an annual information report on its website addressing both the allocation and impact reporting.
3 Green Bond Framework – Management and Use of Proceeds
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Program/Project Name Program/Project Description & Eligible Funding
SkyTrain Extension (Evergreen Extension)
$200 million eligible funding for the Evergreen Extension, which opened in December 2016. The Evergreen Extensions added 11 km and 6 new stations to the Millennium Line, servicing Burnaby, Port Moody, Coquitlam. Infrastructure at each station, aside from the SkyTrain, also supports bus, cycling and pedestrian travel-modes.
SkyTrain Station Upgrades $135 million for SkyTrain station upgrades, including Canada Line, as well as Expo and Millennium Line signage and station fixture replacement.
Refurbishment and Purchase of Rapid Transit Vehicles
$12.1 million for the refurbishment of Mark I SkyTrain vehicles, the purchase of 56 Mark III SkyTrain vehicles, and the purchase of 24 Hyundai Rotem vehicles for the Canada Line.
SkyTrain Operations and Maintenance Projects
$63.4 million for SkyTrain Operations and Maintenance facility upgrades, propulsion power upgrades, rail replacement and switch controls.
4 Eligible Green Projects – 2018 Issuance
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Program/Project Name Program/Project Description & Eligible Funding
Electric Bus Projects $10.8 million for electric trolley bus equipment upgrades and replacement, trolley bus overhead pole installation, state of good repair work and new zero emission battery-electric buses and charging stations.
Transit Centre Energy Efficiency Upgrades
$1.6 million for energy efficiency upgrades such as lighting retrofits and upgrades, door replacements, facility upgrades.
Customer Experience
$17.5 million for PA system upgrades (passenger public announcement), customer service/live chat upgrades, trip data information, customer and operations tele-communication upgrade, advanced radio systems and wayfinding system upgrades. The eligible funding also supports Compass Card system updates.
Bike Infrastructure $3.6 million for bicycle parkades, cycling infrastructure investment and monitoring programs.
4 Eligible Green Projects – 2018 Issuance
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Opened in December 2016 11 km extension to the
Millennium Line Burnaby, Port Moody, Coquitlam 6 new stations Bus, cyclist, pedestrian
infrastructure at stations
4 Eligible Green Projects – Evergreen Extension
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Metrotown: $69 million, completed in Q2 2018
Joyce – Collingwood: $26 million, under construction. Completion in 2018
Commercial – Broadway: $81 million, under construction. Completion in 2018
Surrey Central: $27 million, under construction. Completion in 2018
4 Eligible Green Projects – On-Going Major Station Upgrades
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SkyTrain Projects New SkyTrain Cars System Upgrades Power Upgrades
Facility Upgrades New / Upgraded SkyTrain Storage Facilities New / Upgraded SkyTrain Maintenance Facilities Bus Transit Centre Upgrades
4 Eligible Green Projects – SkyTrain Projects and Facility Upgrades
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A 10-year inaugural Green Bond in Canadian dollars. Expected size is $300 million with potential room to grow.
Expected to be launched in the context of the existing TransLink domestic bond yield curve.
TransLink’s approach would be to involve both green and non-green investors, although preference will be given to socially responsible investors.
Book build process for issuance with RBC Capital Markets and TD Securities acting as joint bookrunners with exempt coverage.
Emphasis on secondary market making by including participation of seven major dealers in TransLink’s Bond Syndicate.
5 Green Bond Issuance Plan – Expected Deal Structure
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Only Canadian issuing transportation authority Taxing authority Debt service safeguard Strong fiscal management Well-diversified and dedicated revenue sources Excellent growth Strong investment grade ratings Leader in Corporate Sustainability Critical transportation system in a global
gateway region
6 Why TransLink
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Rob Malli, CPA, CMAChief Financial Officer and Executive Vice President, Finance & Corporate Services
Derek Bacchioni, CPA, CATreasury Manager
Christine Dacre, CPA, CGAVice President, Financial Services
Sarah Buckle, BSc.(Env.), CEMDirector, Enterprise Risk & Sustainability
TransLink Contacts
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