MNI BRIEF: Canada Targets Long Bonds For 35% Of New Sales

Canada's government will aim for 35% of bond sales to be made at maturities of 10 years or more in the fiscal year that began April 1, an elevated share that seeks to lock in lower borrowing costs, according to a debt strategy published alongside the budget Thursday.

The plan also calls for continued sales of 50-year bonds, and the overall term to maturity rising to just under seven years from about five years seen in mid-2020, the finance department said. A second sale of green bonds is also being planned. Before the pandemic 20% of bond sales were long-term.

Bond sales will decline to CAD212 billion from CAD255 billion in the last fiscal year. In response to investor demands for a larger treasury bill supply, those auctions will grow to CAD213 billion from CAD187 billion. Cash balances built up as a precaution during Covid will also be slimmed down. Borrowing plans this year include refinancing of CAD369 billion and funding CAD85 billion of new needs.