Canada Preparing to Issue More Ultra-Long Bonds
After first issuing 50-year bonds in 2015, Canada is now considering issuing more ultra-long debt.
It would do this by holding a modified auction for more of the 2.75% coupon bonds maturing in 2064.
The government said in a statement :
The long-term financial security of Canadians is a cornerstone in the Government of Canada's efforts to help protect the middle class and those working hard to join it. Issuing ultra-long bonds locks in low funding costs and reduces refinancing risks to the benefit of Canadians.
However, the government said it might not issue the bonds, depending on market conditions. It also said it won't make ultra-long bonds a regular part of its funding plans. The statement explains:
Ultra-long bond issuance remains a tactical funding measure and is not part of the regular bond program. There is no commitment to issue ultra-long bonds and other factors may preclude the Government from issuing these securities, even if the above criteria are met.
The Bank of Canada would handle the auction and already had terms up on its website for the auction.
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