Government of Canada issues new U.S.-dollar global bond

The Canadian government will launch a U.S.-dollar-denominated global bond on Tuesday, subject to market conditions. The launch provides funds to supplement and diversify Canada’s liquid foreign reserves.

The country’s liquid foreign reserves serve as a source of prudential liquidity and help promote orderly market conditions for the loonie in foreign exchange markets.

“This U.S.-dollar global bond will further strengthen the stability of Canada’s foreign currency reserves while meeting investor demand for high-quality assets backed by Canada’s triple-A credit ratings from most major credit rating agencies,” the Department of Finance said in a release.

In the 2024 federal budget, the government reiterated its commitment to maintain liquid foreign reserves at or above 3% of nominal GDP.

The budget estimated net funding requirements for 2024–25 for the reserves to be US$11 billion but may vary because of movements in foreign interest rates and exchange rates. A mix of sources will be used, along with the issuance of global bonds.

Michelle Schriver

Michelle is a senior reporter for Advisor.ca and sister publication Investment Executive. She has worked with the team since 2015 and been recognized by the National Magazine Awards and SABEW for her reporting. Email her at michelle@newcom.ca.