The San Francisco region’s mass transit BART system, or Bay Area Rapid Transit, is set to offer its first ever green bonds. Over $380 million is expected to be raised by the offerings, which were rated Aaa by Moody’s and AAA by Standard and Poor’s.
What “Green” Means
The bonds were certified by the Climate Bond Initiative’s rigorous Low Carbon Land Transport Standard. It signals to investors that funds raised from these bonds will be directed toward environmentally sustainable projects for BART.
BART Controversies
The bond offerings come at a time when BART has been controversial in recent news.
Crime is up about 22% in the first three months of this year, compared to the same period last year. A BART customer has filed a lawsuit for a crime committed against his family in March this year.
Its aging fleet, designed in the 1950s, lags those of other modern nations like Singapore’s, Japan’s and of 33 other cities, in a February best airport by train transit ranking by Milecards.
And its ridership, now almost 500,000 each week, continues to grow, and is often subjected to chronic delays, according to its own internal studies. Most of the delays occur at the MacArthur and West Oakland stations and are, by its own admission, due to “worn out parts and unreliable trains.”
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BART’s Press Release Announcement
“BART is preparing its first-ever Green Bonds, certified by the Climate Bonds Initiative. BART plans to hold an early order period exclusively for individual investors on May 9, 2017. The Series 2017 Green Bonds are General Obligation Bonds secured by ad valorem property taxes collected in the three-county BART district.
This is not an offer to sell bonds or a solicitation of an offer to buy bonds. Investors must have access to the Official Statement for the bonds and have access to a brokerage account in order to purchase them.
The estimated $388 million of proceeds expected from the sale of these Green Bonds will be a significant investment in climate-friendly mass transportation for the Bay Area, funding continuing work on improving BART’s core infrastructure including track replacement, tunnel repair, station improvements and train control system upgrades to allow more safe, reliable and frequent service per Measure RR for the BART System Renewal Program as well as refinancing prior projects completed per Measure AA for the Earthquake Safety Program.
The bond issue meets the rigorous criteria established by the Climate Bonds Initiative relating to reporting and transparency, and will pay for projects that provide low-carbon transportation alternatives for Bay Area residents and reduce the impacts of climate change.”
Sources: BART, KRON4, Climate Bonds Initiative, Milecards
