Yesterday, the Government of Canada issued a 5-year US$3.5 billion global bond.
Issuing a global bond provides funds to supplement and diversify Canada's liquid foreign reserves. Liquid foreign reserves are a source of prudential liquidity and promote 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 the globe.
The issuance of a global bond is in line with the commitment that the government reiterated in Budget 2021 to maintain liquid foreign reserves at or above 3 per cent of nominal gross domestic product.
Quick facts
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Yesterday, the government issued a US$3.5 billion global bond at 6 basis points over the 5-year US Treasury maturing on May 19, 2026.
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The issuance received strong demand from investors in North America, Europe, and Asia, as indicated by an order book that was in excess of US$7 billion.
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Thanks to strong demand, this global bond issuance priced more tightly than any of the 5-year US dollar bonds issued by Canada's peers in recent history.
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The bond transaction will provide cost-effective and diversified funding for the liquid foreign reserves held in the Exchange Fund Account.
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The Government of Canada last issued a US-dollar bond in January 2020 worth US$3 billion.
