MBTA to issue first 'sustainability bond'

The Massachusetts Bay Transportation Authority (MBTA) on Sept. 26 will issue $574 million worth of bonds, most of which have been deemed "sustainable," the agency announced yesterday.

Proceeds from sustainability bonds are used exclusively on projects that have environmental or social benefits.

The International Capital Market Association established standards for determining project eligibility, tracking bond proceeds and reporting on project impact. The MBTA has adopted a sustainability bond framework to ensure conformance to those standards, MBTA officials said in a press release.

"The MBTA is proud to be setting this precedent. It represents what we stand for as an organization, and we hope that private capital continues to support worthy public causes," said MBTA Treasurer Paul Brandley.

Other transit agencies that have sold similar types of bonds include Bay Area Rapid Transit, the Metropolitan Transportation Authority and Sound Transit.