Government strengthens Canada’s international foreign reserves by issuing global bond

From: Department of Finance Canada

Ensuring the long-term financial security of Canadians is a keystone of the Government of Canada’s efforts to help protect the middle class and those working hard to join it. Today, the Government of Canada successfully issued a 5-year US$3 billion global bond.

Issuing a global bond provides funds to supplement and diversify Canada’s foreign exchange reserves. Foreign exchange reserves provide a general source of prudential liquidity and support the promotion of orderly conditions for the Canadian dollar in foreign exchange markets.

The investor base for the 5-year bond issue includes a wide range of central banks, other official institutions and foreign-based investment funds across a diverse geographical area.

The issuance of a global bond is in line with the commitment that the government made in Budget 2019 to maintain liquid foreign reserves at or above 3% of nominal gross domestic product.

Quick facts

  • Today, the government issued a US$3 billion global bond at 6 basis points over the 5-year US Treasury maturing on January 22, 2025.

  • The issuance received strong demand from investors in North America, Europe and Asia. The deal was met by high investor demand as indicated by an order book that was in excess of US$7 billion.

  • The global bond priced tighter than any of Canada’s peers in US dollars in the 5-year term and achieved its best pricing ever.

  • This reflects Canada’s strong economic and sound fiscal management, which supports the country’s triple-A credit rating.

  • The bond transaction achieved all of the government’s objectives, including the provision of cost-effective and diversified funding for the foreign exchange reserves held in the Exchange Fund Account.

  • The Government of Canada last issued a US-dollar bond in January 2019 worth US$3 billion.

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