Government strengthens Canada’s foreign reserves by issuing US-dollar global bond

From: Department of Finance Canada

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

  • 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.

  • 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.

  • 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.

  • The bond transaction will provide cost-effective and diversified funding for the liquid foreign reserves held in the Exchange Fund Account.

  • The Government of Canada last issued a US-dollar bond in January 2020 worth US$3 billion.

/Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.