Canadian provinces are borrowing as fast as they can:
Canadian provinces have rolled out a flurry of bond sales as they scramble to lock in borrowing costs before a global-market rout intensifies.
Five of Canada’s 10 provinces sold bonds last week, raising C$2.55 billion ($1.92 billion). That boosted last month’s total to the largest for a November since 2012, according to data compiled by Bloomberg. The country’s oil-rich province of Alberta followed up its Canadian dollar issue with the sale of $2.25 billion of U.S. dollar bonds on Thursday.
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Ontario sold C$750 million of bonds maturing in 2048 on Tuesday, while Quebec found buyers for C$500 million of similar-maturity securities on the same day. On Wednesday, Newfoundland and Labrador followed up with a sale of C$500 million of 2048 notes, while Alberta and Saskatchewan sold C$500 million and C$300 million of 10-year securities respectively. On Thursday, Alberta took to the markets again, selling $2.25 billion of three-year bonds.Canadian provinces and municipalities sold C$13.1 billion of local-currency debt last month, taking the total for the year to C$121.2 billion, which is C$7.4 billion short of the record 2012, data compiled by Bloomberg show.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1355 % | 1,758.3 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.1355 % | 3,212.1 |
| Floater | 4.26 % | 4.41 % | 48,382 | 16.50 | 4 | 0.1355 % | 1,851.1 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2055 % | 2,926.3 |
| SplitShare | 4.83 % | 4.53 % | 52,322 | 4.33 | 6 | 0.2055 % | 3,494.6 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2055 % | 2,726.6 |
| Perpetual-Premium | 5.46 % | 5.21 % | 83,837 | 14.37 | 23 | -0.0769 % | 2,650.6 |
| Perpetual-Discount | 5.46 % | 5.47 % | 93,247 | 14.66 | 15 | -0.0150 % | 2,746.1 |
| FixedReset | 4.85 % | 4.64 % | 207,278 | 6.81 | 96 | -0.0718 % | 2,105.5 |
| Deemed-Retractible | 5.19 % | 5.29 % | 137,685 | 4.58 | 32 | -0.1799 % | 2,740.5 |
| FloatingReset | 2.83 % | 3.83 % | 45,159 | 4.83 | 12 | 0.0808 % | 2,308.2 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| FTS.PR.M | FixedReset | -1.34 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 19.14 Evaluated at bid price : 19.14 Bid-YTW : 4.75 % |
| TD.PR.T | FloatingReset | -1.29 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2022-01-31 Maturity Price : 25.00 Evaluated at bid price : 22.91 Bid-YTW : 3.83 % |
| MFC.PR.O | FixedReset | -1.29 % | YTW SCENARIO Maturity Type : Call Maturity Date : 2021-06-19 Maturity Price : 25.00 Evaluated at bid price : 26.11 Bid-YTW : 4.49 % |
| GWO.PR.Q | Deemed-Retractible | -1.26 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.50 Bid-YTW : 6.08 % |
| GWO.PR.S | Deemed-Retractible | -1.15 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.13 Bid-YTW : 5.77 % |
| TRP.PR.D | FixedReset | -1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 18.04 Evaluated at bid price : 18.04 Bid-YTW : 4.91 % |
| HSE.PR.G | FixedReset | -1.00 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 21.40 Evaluated at bid price : 21.73 Bid-YTW : 5.24 % |
| GWO.PR.N | FixedReset | 1.33 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 13.70 Bid-YTW : 10.69 % |
| HSE.PR.A | FixedReset | 1.36 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 12.66 Evaluated at bid price : 12.66 Bid-YTW : 5.31 % |
| SLF.PR.K | FloatingReset | 2.51 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 16.75 Bid-YTW : 8.26 % |
| CCS.PR.C | Deemed-Retractible | 2.63 % | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.05 Bid-YTW : 6.22 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| MFC.PR.R | FixedReset | 279,705 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 24.92 Bid-YTW : 4.96 % |
| TRP.PR.K | FixedReset | 177,481 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 23.09 Evaluated at bid price : 24.89 Bid-YTW : 4.85 % |
| GWO.PR.G | Deemed-Retractible | 149,990 | YTW SCENARIO Maturity Type : Hard Maturity Maturity Date : 2025-01-31 Maturity Price : 25.00 Evaluated at bid price : 23.91 Bid-YTW : 5.86 % |
| FTS.PR.K | FixedReset | 120,074 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 17.58 Evaluated at bid price : 17.58 Bid-YTW : 4.57 % |
| BAM.PF.B | FixedReset | 92,500 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 19.05 Evaluated at bid price : 19.05 Bid-YTW : 5.01 % |
| TRP.PR.H | FloatingReset | 65,602 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2046-12-05 Maturity Price : 11.37 Evaluated at bid price : 11.37 Bid-YTW : 3.84 % |
| There were 46 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IFC.PR.D | FloatingReset | Quote: 19.60 – 22.50 Spot Rate : 2.9000 Average : 1.6313 YTW SCENARIO |
| SLF.PR.K | FloatingReset | Quote: 16.75 – 17.99 Spot Rate : 1.2400 Average : 0.8311 YTW SCENARIO |
| MFC.PR.O | FixedReset | Quote: 26.11 – 26.50 Spot Rate : 0.3900 Average : 0.2775 YTW SCENARIO |
| TD.PR.T | FloatingReset | Quote: 22.91 – 23.30 Spot Rate : 0.3900 Average : 0.2967 YTW SCENARIO |
| FTS.PR.G | FixedReset | Quote: 17.83 – 18.04 Spot Rate : 0.2100 Average : 0.1290 YTW SCENARIO |
| BAM.PR.T | FixedReset | Quote: 17.20 – 17.41 Spot Rate : 0.2100 Average : 0.1307 YTW SCENARIO |
If there is a global bond market route, it will make for very interesting times. Corporations, governments and individuals worldwide are hugely indebted. From what I have read we are at record levels of indebtedness.
I’m not expecting a return to the early 80’s with interest rates in the high teens, but even a return interest rates that will give us a positive return after inflation and taxes will cause huge problems.
I think that in a few years we will look back the recent negative interest rate environment and wonder what bond investors were thinking. I believe we are in a debt bubble, but I have no idea when it will burst. “The trouble with bubbles is that they either make you look like a fool on the way up or a fool when they burst” – can’t remember where I read that.
Yes, there are a lot of people desperately hoping that their incomes increase faster than interest rates. For many, it will be tough.
I agree with your quote on bubbles!
That’s why I like these floaters trading at close to half par. They will have 2x increase in yields versus their reference rate.
That’s why I like these floaters trading at close to half par. They will have 2x increase in yields versus their reference rate.
Yes, it’s a very nice feature of these deeply discounted issues.