Quebec restarts provincial bond sales

Quebec raised $500 million by tapping its existing 2.75 per cent bond due in 2028 in the first sale of long-term debt by a Canadian province in two weeks.

The province sold the bonds at a relative yield of 59.5 basis points over federal government bonds, according to data compiled by Bloomberg. That’s the lowest spread of the nine offerings of these bonds, which were first sold in April.

This is the first sale of bonds by a Canadian province since Oct. 25, when Ontario issued 10-year notes, as the risk premium investors demand to hold the securities jumped to a six-month high amid a global bond sell off. The spreads tightened this month as the supply of new bonds slowed and investors’ risk aversion declined. As of Sept. 10, Quebec had completed about 81 per cent of its $13.4 billion borrowing program for the current fiscal year ending March 31, according to a statement on the finance ministry’s website. Quebec is also considering a sale of bonds due December 2051, a press officer for the province said last month.