Vancouver sells $175-million, 10-year bond at 4.35 per cent for capital projects

Vancouver will pay roughly $7.61 million a year in interest for the next decade after selling a $175-million bond to help fund capital projects, and City staff say investors wanted more of the debt than was available.

Two internal staff memos to council say the 10-year bond was sold on Oct. 22, 2026. The deal is scheduled to settle Oct. 30, with repayment due in October 2036. According to the memos, the overall borrowing cost landed lower than staff had first anticipated. Daily Hive reported on the memos.

The money goes toward eligible capital projects, and the interest is paid out of the City's operating budgets, which cover debt-servicing costs. That makes the rate on each borrowing a direct line item for city finances.

The bond pays a fixed 4.35 per cent a year, in two instalments annually. Once bank fees are counted, the all-in cost rises to 4.43 per cent. Staff settled on a 10-year term because it was cheaper than the 20- to 30-year alternatives, the memos say.

The debt is a sinking fund debenture, meaning the City puts money aside over time to repay it at maturity rather than finding the full sum in one go.

Council gave its approval in July 2026 for issuing up to $175 million, leaving staff to set the rate, pricing and other terms. BMO Capital Markets led the sale, with CIBC World Markets and National Bank Financial as co-leads.

Staff described a tricky market. They cited persistent inflation, expectations that the Bank of Canada could hold interest rates higher for longer, and a heavier supply of bonds. Even so, demand exceeded the amount on offer. The City carries strong credit ratings: Aaa from Moody's and AAA from S&P Global Ratings, both with stable outlooks.

Elsewhere in the region, TransLink's latest bond issuance came in June 2026, when it sold $300 million in green bonds at 3.85 per cent, due in December 2035. Its borrowing program has included more than $2 billion in green bonds since 2018.

Borrowing could soon become a bigger part of the City's housing conversation. Mayor-elect Pete Fry wants an additional municipal bond program to help finance affordable housing on City-owned land, and he has acknowledged that the financial mechanics still need to be worked out.