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Canada considers reopening its 50-year bond

Published 2017-08-17, 12:04 p/m
© Reuters.  Canada considers reopening its 50-year bond

TORONTO, Aug 17 (Reuters) - Canada, which issued its first ultra-long bond in April 2014, is considering more in the future, the government said on Thursday.

Any issuance would be done by reopening that 50-year bond via a modified auction, subject to market conditions, the government said on the Bank of Canada website.

The 2.75 percent bond, which matures on Dec. 1, 2064, had C$3.5 billion outstanding at the end of July. Canada last reopened the bond in November 2014 with a C$1 billion issue.

Canada is one of the few leading industrialized nations with an undisputed AAA rating, and its bonds are in high demand.

Ultra-long bonds have a term to maturity of 40 years or more. A 50-year duration for sovereign bonds is not as common as a 30-year, although several Canadian provinces already issue ultra-long bonds.

Earlier this year, U.S. Treasury Secretary Steven Mnuchin said the United States was studying the possibility of issuing 50-year and 100-year bonds. Debt for both Mexico and Ireland has durations of up to a century.

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