Review of Debt New Issues and Trading First Quarter 2005 · 2012-01-31 · Review of Debt New...
Transcript of Review of Debt New Issues and Trading First Quarter 2005 · 2012-01-31 · Review of Debt New...
Review of Debt New Issuesand Trading
First Quarter 2005
� Not surprisingly, the Canadian bond market shifted to a slower
gear in Q1 2005 following a record pace in the fourth quarter
and year. Total bond issuance was $38.5 billion, down 21%
quarter-over-quarter and off 14% compared to the same quarter a
year ago.
� Total bond trading slipped to $1.46 trillion in the fi rst quarter,
down a mere 1.4% from the robust fourth quarter. On a yearly
basis, total bond trading was up 3.4% from 2004.
� Federal bond trading was almost unchanged in the fi rst quarter at
$1.29 trillion, off just 0.7% from the robust fourth quarter and up
3% year-over-year.
� Government of Canada gross bond issuance was $16.1 billion,
unchanged from the fourth quarter. However, Government of
Canada issuance was down 5.7% year-over-year.
� Trading in corporate bonds stood at $64.1 billion, down 3.3%
quarter-over-quarter, but up 16.1% compared to the same quarter
a year ago.
� Corporate bond fi nancings totaled $13.5 billion in the fi rst
quarter, down 42.9% quarter-over-quarter and off 5.4% year-
over-year.
� Provincial bond issuance stood at $8.7 billion in the fi rst quarter,
a decline of 11.4% from the fourth quarter and 31.8% from the
same quarter a year ago.
� Money market trading climbed to $1.24 billion in the fi rst
quarter, up 8% quarter-over-quarter and 12% compared to the
same quarter in 2004.
Debt Markets: Shifting Gears?
This Quarter’s Highlights
Investment Dealers Association of Canada May 2005
Review of Debt New Issues and Trading - 2005 Q1 2
-100
-50
0
50
100
150
200
250
2005200420032002200120001999
Canadian and US Short and Long Yield Spreads
Spre
ad (
bps)
Canada-US 3-month T-bill Canada-US 10 Year
Government Bond Yield
No sizzle and no fi zzle. That pretty much captured the tone of the debt market in the fi rst quarter as activity shifted to a slower gear. Indeed, bond issuance scaled back to just $38.5 billion in the fi rst quarter, a decrease of 21% from the fourth quarter and 14% from the same period last year. Debt trading, however, was more upbeat, off only a modest 1.4% from the red hot fourth quarter. Nevertheless, the reduced activity in the fi rst quarter hardly comes as a big surprise. Following on the heels of a record fourth quarter in debt issuance and trading is a hard act to match, let alone beat. However, put into perspective, the fi rst quarter’s slowdown isn’t too worrisome. After all, debt trading and issuance activity continued to remain at or above trend levels.
On the fi nancing front, bond issuance defi nitely took a big step back in the quarter. Federal, provincial, municipal and corporate borrowings were relatively low key, with debt issuance down on a quarterly and yearly basis. Barring the base comparison distortion, debt fi nancings in 2005 may not be as robust as last year despite the still favorable interest rate backdrop. For the corporate sector, Corporate Canada will likely ease into a consolidation mode following a banner year of fi nancings and M&A activity. With corporate balance sheets now in better shape, this could help reduce the need for corporations to issue debt this year. Meanwhile, municipal and provincial fi nancings may also cool in the coming months after some sizeable fi nancing projects last year. Lastly, with the Federal Government sticking to its debt reduction strategy, this should also translate into fewer federal bond fi nancings in the pipeline.
On the trading front, investors remained active in the fi xed income market -- total bond trading was off just 1.4% quarter-over-quarter but up 3.4% from the same period a year ago. While the decline was broad-based, interest remained particularly high in Government of Canada bonds: trading was down a mere 0.7% from the vigorous fourth quarter and up 3.1% from the same quarter a year ago. Corporate bond trading in the fi rst quarter was also slightly lower, down 3.3% quarter-over-quarter but up an impressive 16% from the same quarter last year. In contrast, municipal bonds suffered the steepest setback with trading down 19% quarter-over-quarter and 7% year-over-year.
The Bank of Canada (BoC) isn’t on a monetary tightening path like the Fed – yet. Moderate infl ation and the recent softening in economic data have kept the BoC on the sidelines this quarter and the overnight rate unchanged at a low 2.5%. Canada-US spreads turned negative (-24 bps) for short rates and narrowed further (25 bps) for long rates in the fi rst quarter. The ongoing spread narrowing is clearly refl ective of US rates ramping up at a faster pace than Canadian yields. The difference in monetary policy stances between the Fed and the BoC suggests that the Canadian yield curve may be steeper (less fl at) than the US curve in the near term. However, market expectations for tighter credit conditions are growing, with a possible rate hike by the BoC in the second half of this year.
Q1 2005 Debt Markets: Shifting Gears?
Review of Debt New Issues and Trading - 2005 Q1 3
Historical Short-Term Interest Rates
Bon
d Y
ield
s
(%)
Sp
read
(bp
s)
1 -Month T-bi l l
Source: Bank of Canada
0
2
4
6
8
10
0
20
40
60
80
100
120
20052004200320022001200019991998199719961995
1-Month Corporate 1-Month Spread
Note: 1-Month Corporate = Prime Corporate Paper Rate
Historical Long-Term Interest Rates
Bon
d Y
ield
s
(%)
Sp
read
(bp
s)
Long Term Canadas
Source: Bank of Canada
4
6
8
10
12
0
50
100
150
200
20052004200320022001200019991998199719961995
Long Term Corporates Spread
Notes:
Long-Term Canadas = Government of Canada Marketable Bonds, average yield over 10 years
Long Term Corporates = Average Weighted Yield (Scotia Capital Inc.) - Al l Corporates Long-Term, over 10 yrs
Canadian Interest Rates� In contrast with the Fed’s steady pace of rate hikes, the BoC stood pat in the fi rst quarter. Canada’s overnight rate remained at a mere 2.5%.
� The BoC had little reason to tighten credit conditions in the quarter given the softening economic data and contained infl ationary pressures.
� 2005 kicked off the year with Canadian short rates hardly budging in the quarter. Short spreads remained anchored at 12 bps in the fi rst quarter.
� In contrast with short rates, long rates drifted lower in the quarter. The 10-year government yield fell to 4.75% while Corporates edged down to 5.73%.
Review of Debt New Issues and Trading - 2005 Q1 4
Government of Canada Bonds: Trading and Issuance� Investor interest in Government bonds continued on a high note in 2005. Total trading in Government of Canada and Federal Crown Corporation bonds hit a 7-year high at $1.29 trillion in the fi rst quarter, up 5% quarter-over-quarter and 9% over the same period a year ago.
� Total government debt fi nancings stood at $16.1 billion in the fi rst quarter in 23 issues, unchanged in value from the fourth quarter.
� However, compared with the same period a year ago, total Government bond issuance was down 6% in value, refl ective of the Government’s debt reduction strategy.
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5
10
15
20
600
900
1200
1500
20052004200320022001200019991998199719961995
Total Quarterly Canada Bond Gross Issuance and Trading
Gro
ss N
ew
Issu
es D
eli
vere
d
($
Bil
lion
s)
Qu
arte
rly T
rad
ing
($ B
illion
s)
Gross Issuance Total Bond Trading
Source: Investment Dealers Associat ion
Quarterly Comparison of Government of Canada Bond IssuanceChange Change Change Change
Quarter
Quarter- Year- Number Quarter- Year-
Value over- over- of over- over-
($ Billions) Quarter Year Issues Quarter Year
Q1/04 $17.1 3% 22% 29 -24% 0%Q2/04 $13.7 -20% -5% 33 14% 6%Q3/04 $14.7 7% -9% 16 -52% -53%Q4/04 $16.1 10% -3% 32 100% -18%Q1/05 $16.1 0% -6% 23 -28% -23%
Source: Investment Dealers Assoc. Note: Government of Canada Direct and Guaranteed Bonds, including Crown Corporations,total Gross New Issues Delivered, par value
Quarterly Comparison of Government of Canada Bond Trading Change Change
Quarter
Quarter- Year-
Value over- over-
($ Billions) Quarter Year
Q1/04 $1,187.0 12% 15%Q2/04 $1,170.9 -1% 0%Q3/04 $1,031.8 -12% -9%Q4/04 $1,229.8 19% 16%Q1/05 $1,288.4 5% 9%
Source: Investment Dealers Assoc. Note: Excludes repos
Review of Debt New Issues and Trading - 2005 Q1 5
0
5
10
15
20
1
2
3
4
5
6
200520042003200220012000
Total Quarterly Canada Real Return Bond Gross Outstandings & Trading
Gro
ss N
ew
Issu
es D
eli
vere
d
($
Bil
lion
s)
Qu
arte
rly T
rad
ing
($ B
illion
s)
Total Outstandings Total Bond Trading
Source: Investment Dealers Associat ion
Quarterly Comparison of Government of Canada Real Return Bonds Trading Change Change
Quarter
Quarter- Year-
Value over- over-
($ Billions) Quarter Year
Q1/04 $5.2 13% -13%Q2/04 $4.8 -7% -3%Q3/04 $3.3 -31% -9%Q4/04 $4.0 22% -13%Q1/05 $4.2 4% -19%
Source: Investment Dealers Assoc.
Quarterly Comparison of Government of Canada Real Return Bonds Total OutstandingChange Change
Quarter
Quarter- Year-
Value over- over-
($ Billions)
Quarter Year
Q1/04 $17.6 1.7% 8.6%Q2/04 $18.0 2.3% 8.4%Q3/04 $18.3 1.7% 8.3%Q4/04 $18.7 2.2% 8.1%Q1/05 $19.0 1.6% 7.9%
Source: Investment Dealers Assoc.
Government of Canada Real Return Bonds: Trading and Total Outstanding� Trading in Canada Real Return bonds (RRBs) stood at $4.2 billion in the fi rst quarter, up 4% quarter-over-quarter, but down 19% compared to the same period in 2004.
� Meanwhile, the Government’s outstanding stock of RRBs ballooned to $19.0 billion in the fi rst quarter, up 1.6% quarter-over-quarter and 7.9% compared to the same quarter a year ago.
Review of Debt New Issues and Trading - 2005 Q1 6
0
3
6
9
12
15
40
60
80
100
120
20052004200320022001200019991998199719961995
Total Quarterly Provincial Bond Gross Issuance & Trading
Gro
ss N
ew
Issu
es D
eli
vere
d
($
Bil
lion
s)
Q
uarte
rly T
rad
ing
($ B
illion
s)
Gross Issuance Total Bond Trading
Source: Investment Dealers Associat ion
Provincial Bonds: Trading and Issuance� The popularity of provincial bonds from last year extended into 2005 with trading at a lofty $105.3 billion in the fi rst quarter. While trading was down 7% from the peak fourth quarter, activity was up 1% from the same quarter a year ago and well above the $99 billion quarterly average in 2004.
� Provincial bond fi nancings fell back to $8.7 billion in 56 issues, off 11% quarter-over-quarter in value and down 32% from the same quarter a year ago.
� Meanwhile, Ontario was the largest provincial issuer in the quarter. The largest single deal came from the Ontario Strategic Infrastructure Financing Authority with a $650 million issue.
Quarterly Comparison of Provincial Bond Trading Change Change
Quarter
Quarter- Year-
Value over- over-
($ Billions)Quarter Year
Q1/04 $104.0 22% 12%Q2/04 $93.5 -10% 5%Q3/04 $86.5 -8% 34%Q4/04 $113.6 31% 34%Q1/05 $105.3 -7% 1%
Source: Investment Dealers Assoc.
Note: Excludes repos
Quarterly Comparison of Provincial Bond IssuanceChange Change Change Change
Quarter
Value Quarter- Year- Number Quarter- Year-
($ Billions) over- over- of over- over-
Quarter Year Issues Quarter Year
Q1/04 $12.7 41% 132% 85 6% 29%Q2/04 $9.3 -27% 54% 90 6% 109%Q3/04 $8.2 -12% 37% 49 -46% -25%Q4/04 $9.8 19% 8% 70 43% -13%Q1/05 $8.7 -11% -32% 56 -20% -34%
Source: Investment Dealers Assoc. Note: Total Gross New Issues Delivered, including Crown Corporations, par value
Review of Debt New Issues and Trading - 2005 Q1 7
0.0
0.5
1.0
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2.0
2.5
1
2
3
4
5
20052004200320022001200019991998199719961995
Total Quarterly Municipal Bond Gross Issuance & Trading
Gro
ss N
ew
Issu
es D
eli
vere
d
($
Bil
lion
s)
Qu
arte
rly T
rad
ing
($ B
illion
s)
Gross Issuance Total Bond Trading
Source: Investment Dealers Associat ion
Municipal Bonds: Trading and Issuance� The municipal bond market got off to a rough start in 2005. Trading in municipal bonds tapered off in the fi rst quarter to $2.9 billion, down 19% quarter-over-quarter and 6% from the same quarter in 2004.
� Municipal fi nancings also cooled in the period. Financings in the fi rst quarter totaled a meager $0.23 billion, down 86% quarter-over-quarter and 70% compared to the same quarter in 2004.
� With only 44 municipal issues – less than half of the fourth quarter last year -- this was the lowest number of deals on record since 1996.
Quarterly Comparison of Municipal Bond Trading Change Change
Quarter
Quarter- Year-
Value over- over-
($ Billions) Quarter Year
Q1/04 $3.1 -32% 31%Q2/04 $2.9 -6% -30%Q3/04 $2.4 -17% -28%Q4/04 $3.6 49% -21%Q1/05 $2.9 -19% -6%
Source: Investment Dealers Assoc.
Note: Excludes repos
Quarterly Comparison of Municipal Bond IssuanceChange Change Change Change
Quarter
Quarter- Year- Number Quarter- Year-
Value over- over- of over- over-
($ Billions) Quarter Year Issues Quarter Year
Q1/04 $0.8 -49% 29% 72 -37% 36%Q2/04 $0.6 -15% -70% 51 -29% -24%Q3/04 $0.9 39% -23% 67 31% -4%Q4/04 $1.7 86% 12% 112 67% -3%Q1/05 $0.2 -86% -70% 44 -61% -39%
Source: Investment Dealers Assoc. Note: Total Gross New Issues Delivered, par value
Review of Debt New Issues and Trading - 2005 Q1 8
0
5
10
15
20
25
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10
15
20
25
30
35
40
20052004200320022001200019991998199719961995
Total Quarterly Corporate Bond Gross Issuance & Trading
Gro
ss N
ew
Issu
es D
eli
vere
d
($
Bil
lion
s)
Qu
arte
rly T
rad
ing
($ B
illion
s)
Gross Issuance Total Bond Trading
Source: Investment Dealers Associat ion
Corporate Bonds: Trading and Issuance� Investor interest in corporate bonds remained high with total trading at $33.2 billion in the fi rst quarter -- down 7% from the peak fourth quarter, but up 4% over the same period a year ago.
� First quarter corporate fi nancings dipped to just $13.5 billion in 76 issues, down 43% quarter-over- quarter in value and off 5% from the same period in 2004.
� While fi nancings this quarter have slowed substantially from the peak fourth quarter, activity was still above the $11.7 billion quarterly average posted during 2001-2004.
Quarterly Comparison of Corporate Bond IssuanceChange Change Change Change
Quarter
Quarter- Year- Number Quarter- Year-
Value over- over- of over- over-
($ Billions) Quarter Year Issues Quarter Year
Q1/04 $14.3 -3% 20% 95 13% 51%Q2/04 $12.7 -11% -2% 86 -9% 4%Q3/04 $11.3 -11% -14% 82 -5% -13%Q4/04 $23.7 110% 60% 150 83% 79%Q1/05 $13.5 -43% -5% 76 -49% -20%
Source: Investment Dealers Assoc. Note: Issuance data: Total Gross New Issues Delivered, par value
Quarterly Comparison of Corporate Bond Trading Change Change
Quarter
Quarter- Year-
Value over- over-
($ Billions) Quarter Year
Q1/04 $32.0 -6% -4%Q2/04 $25.9 -19% -29%Q3/04 $28.6 11% -1%Q4/04 $35.8 25% 5%Q1/05 $33.2 -7% 4%
Source: Investment Dealers Assoc.
Note: Trading data excludes repos
Review of Debt New Issues and Trading - 2005 Q1 9
CORPORATE BOND ISSUANCE (Q1/05)SECTOR BREAKDOWN
34
1 MANUFACTURING (HIGH TECH) 0%
2 MANUFACTURING (OTHER) 0.6%
3 SERVICES 5.7%
4 RESOURCES 1.9%
5 UTILITIES 13.8%
5
6 FINANCIAL & REAL ESTATE 72.8%
7 OTHER 5.2% 6
7
SOURCE: Investment Dealers Association
2
CORPORATE BOND ISSUANCE (Q1/04)SECTOR BREAKDOWN
2
4
1 MANUFACTURING (HIGH TECH) 0%
2 MANUFACTURING (OTHER) 0.1%
3 SERVICES 11.8%
4 RESOURCES 2.5%
5 UTILITIES 8.6%
5
6 FINANCIAL & REAL ESTATE 59.1%
7 OTHER 18%6
7
SOURCE: Investment Dealers Association
3
Sector Breakdown of Corporate Bond Issues
Top Corporate Bond Issues for Q1 2005: 8 Over $500 Million
Issuer Sector% Total Issuance
Value
Value
($ millions)
Bank of Nova Scotia Financial & Real Estate $1,000.0 7.4%Genesis Trust Financial & Real Estate $1,000.0 7.4%Bell Canada Utilities $700.0 5.2%GE Capital Canada Funding Co Financial & Real Estate $600.0 4.4%CIBC Financial & Real Estate $580.0 4.3%Bank of Montreal Financial & Real Estate $500.0 3.7%CARDS II Trust Other $500.0 3.7%Genesis Trust Financial & Real Estate $500.0 3.7%
Total $5,380.0 39.8%
Review of Debt New Issues and Trading - 2005 Q1 10
Utilities Financial & Real Estate
Other
Quarter Value Number Value Number Value Number($ Millions) of Issues ($ Millions) of Issues ($ Millions) of Issues
Q1/04 $1,080.0 4 $8,230.2 57 $2,568.9 19Q2/04 $674.0 5 $9,127.4 57 $812.7 12Q3/04 $605.0 6 $8,043.4 53 $1,488.8 11Q4/04 $1,832.2 12 $13,528.8 77 $2,988.7 27Q1/05 $1,862.0 9 $9,845.1 49 $707.0 8
Notes:1. Highest sector issuance value bolded for each quarter2. Services sector includes: High Tech Services and Other Services3. Resources sector includes: Forestry, Mining and Oil & GasSource: Investment Dealers Assoc.
Quarterly Comparison of Corporate Bond Issuance by Sector ($ Millions)Manufacturing High
TechManufacturing Other Services Resources
Quarter Value Number Value Number Value Number Value Number($ Millions) of Issues ($ Millions) of Issues ($ Millions) of Issues ($ Millions) of Issues
Q1/04 $0.0 0 $8.0 1 $1,686.5 8 $355.0 4Q2/04 $0.0 0 $50.0 1 $1,605.0 7 $435.0 4Q3/04 $0.0 0 $415.0 5 $400.0 2 $323.0 5Q4/04 $12.8 1 $302.0 5 $2,449.9 10 $295.0 3Q1/05 $0.0 0 $82.5 2 $764.9 4 $260.0 4
� The fi nancial sector dominated the fi nancing scene with over 70% of the total corporate bond issuance in the fi rst quarter. Trailing behind in a distant second spot is the utilities sector with 13.8% of total issuance.
� A pair of $1 billion issues from the Bank of Nova Scotia and Genesis Trust and a $700 million deal from Bell Canada helped buoy total corporate bond fi nancings to $5.38 billion in the fi rst quarter.
Review of Debt New Issues and Trading - 2005 Q1 11
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Quarterly Issuance of Medium Term Notes
Gro
ss N
ew
Issu
es D
eli
vere
d
($
Bil
lion
s)
Corporate Government
Source: Investment Dealers Associat ion
Medium Term Notes: Issuance� 2005 started the year with Corporates regaining the lead from Governments in MTN issuance. Corporate MTN issuance shot back up to $6.4 billion in the fi rst quarter, an impressive gain of 78% quarter-over-quarter and 5% increase over the same period a year ago.
� MTN government fi nancings totaled $6.1 billion in the fi rst quarter, an increase of 23% quarter- over-quarter. However, compared to the same quarter a year ago, MTN government fi nancings are off 15% in value.
� Despite the increase in value for both Corporates and Government MTNs, there were fewer deals this quarter. Government issues were off 13% quarter-over-quarter while Corporates were down 38% quarter-over-quarter.Quarterly Comparison of Medium Term Note Issuance: Government
Change Change Change Change
Quarter
Quarter- Year- Number Quarter- Year-
Value over- over- of over- over-
($ Billions) Quarter Year Issues Quarter Year
Q1/04 $7.2 39% 119% 73 -3% 20%Q2/04 $4.4 -39% 18% 84 15% 91%Q3/04 $4.1 -6% 19% 39 -54% -45%Q4/04 $5.0 21% -3% 63 62% -16%Q1/05 $6.1 23% -15% 55 -13% -25%
Source: Investment Dealers Assoc.
Quarterly Comparison of Medium Term Note Issuance: CorporateChange Change Change Change
Quarter
Quarter- Year- Number Quarter- Year-
Value over- over- of over- over-
($ Billions) Quarter Year Issues Quarter Year
Q1/04 $6.1 -2% -25% 41 86% 14%Q2/04 $8.4 37% 18% 29 -29% -3%Q3/04 $3.7 -55% -44% 31 7% 0%Q4/04 $3.6 -5% -42% 47 52% 114%Q1/05 $6.4 78% 5% 29 -38% -29%
Source: Investment Dealers Assoc.
Review of Debt New Issues and Trading - 2005 Q1 12
0
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10
15
20
20052004200320022001
Quarterly Strip Bond Trading
Qu
art
erl
y T
rad
ing
($ B
illi
on
s)
P rovincial Str ip Bond Trading
Government of Canada Str ip Bond Trading
Source: Investment Dealers Associat ion
Quarterly Comparison of Canadian Strip Bond Trading Government of Canada Strip
Bonds Provincial Strip Bonds Total Strip Bonds
Quarter
Change Change Change Change Change Change
Quarter- Year- Quarter- Year- Quarter- Year-
Value over- over- Value over- over- Value over- over-
($ Billions) Quarter Year ($ Billions) Quarter Year ($ Billions) Quarter Year
Q1/04 $8.6 -37% 4% $18.7 7% 12% $28.4 -13% 9%Q2/04 $17.7 105% 8% $18.9 1% 9% $37.9 34% 10%Q3/04 $10.2 -43% 11% $12.3 -35% -6% $24.1 -36% 4%Q4/04 $13.2 30% -3% $16.8 37% -4% $31.7 32% -2%Q1/05 $11.4 -14% 32% $15.3 -9% -18% $28.1 -11% -1%
Source: Investment Dealers Assoc. Note: Trading data excludes repos, Components will not add to total as Corporate Strips are not reported
Strip Bonds: Trading� Strip bond trading totaled $28.1 billion in the fi rst quarter, down 11% quarter-over-quarter and 1% from the same quarter in 2004.
� Demand for both provincial and Government of Canada eased in the fi rst quarter -- trading in provincials was down 14% and off 9% in Governments from the fourth quarter.
Review of Debt New Issues and Trading - 2005 Q1 13
Money Market Trading (Quarterly Totals)
BA
's &
Com
merc
ial
Pap
er
Tra
din
g
($
Bil
lion
s)
T-b
ills T
rad
ing
($ B
illion
s)
Commercial Paper
Source: Investment Dealers Associat ion
100
200
300
400
500
600
700
800
0
200
400
600
800
1000
1200
20052004200320022001200019991998199719961995
Bankers ' Acceptance Government of
Canada T-Bil ls
Quarterly Comparison of Canadian Money Market Trading
Government of Canada T-Bills Bankers’ Acceptances (BA’s)Corporate and Finance Company
(Commercial) Paper
Quarter
Change Change Change Change Change Change
Quarter- Year- Quarter- Year- Quarter- Year-
Value over- over- Value over- over- Value over- over-
($ Billions) Quarter Year ($ Billions) Quarter Year ($ Billions) Quarter Year
Q1/04 $344.4 -1% 23% $286.0 -6% -7% $481.9 -8% -5%Q2/04 $335.1 -3% 17% $247.9 -13% -19% $471.0 -2% -7%Q3/04 $346.9 3% 12% $246.7 0% -10% $481.1 2% -3%Q4/04 $337.3 -3% -3% $260.2 5% -14% $551.2 15% 6%Q1/05 $344.9 2% 0% $305.9 18% 7% $589.8 7% 22%
Source: Investment Dealers Assoc. Note: Trading data excludes repos
Money Market: Trading� Money market trading continued on a strong note in the fi rst quarter. Total trading climbed to $1.24 billion in the fi rst quarter, up 8% quarter-over-quarter and 12% from the same quarter in 2004.
� Trading in commercial paper reached $590 million in the fi rst quarter, up 7% quarter-over-quarter and 22% from the same quarter a year ago. Commercial paper accounted for almost half of the total money market trading in the period.
� Meanwhile, Government of Canada T-bill trading edged up to $344.9 billion in the quarter, up 2% over the fourth quarter and fl at from the same period a year ago. Trading activity also increased for BA’s in the fi rst quarter which reached $305.9 billion, a gain of 18% quarter-over-quarter and 7% year-over-year.
Review of Debt New Issues and Trading - 2005 Q1 14
Summary of Bond Trading and Issuance
($ billions except where indicated otherwise)
Q4 2004
Q1
05/Q4 04%
change Q1 2004
2002 2001
Q1 05/Q1 04 2004 2003 2004/2003
Q1 2005 % change % change
Government of Canada Bonds*Trading $1,288.4 $1,297.4 -0.7% $1,250.0 3.1% $4,852.4 $4,545.7 6.7% 3,790.0 3,784.3Issuance $16.1 $16.1 0.1% $17.1 -5.7% $61.5 $61.1 0.7% 61.4 47.7
Provincial Bonds Trading $105.3 $113.6 -7.3% $104.0 1.3% $397.6 $331.8 19.8% 319.9 313Issuance $8.7 $9.8 -11.4% $12.7 -31.8% $39.9 $26.6 50.0% 20 19
Municipal Bonds Trading $2.9 $3.6 -19.4% $3.1 -6.5% $12.0 $14.2 -15.5% 11.1 11.3Issuance $0.2 $1.7 -86.1% $0.8 -69.5% $3.8 $5.4 -29.6% 4 3.1
Corporate Bonds** Trading $64.1 $66.3 -3.3% $55.2 16.1% $225.0 $219.0 2.7% 127 101.9Issuance $13.5 $23.7 -42.9% $14.3 -5.4% $59.5 $54.2 9.8% 32.4 39.8
Total Bonds Trading $1,460.7 $1,480.9 -1.4% $1,412.3 3.4% $5,487.0 $5,110.7 7.4% 4,248.1 4,210.5Issuance $38.5 $48.9 -21.2% $44.8 -14.1% $164.9 $147.2 12.0% 117.8 109.6
Note: Trading data excludes repos * Includes Government of Canada Bonds and Federal Crown Corporation Bonds**Includes Corporate Bonds, Commercial Paper, Asset-Backed Securities and Other Domestic BondsSource: Investment Dealers Assoc.
The Investment Dealers Association of Canada is the national self-regulatory organization and representative of the securities industry. The Association’s mission is to protect investors and enhance the effi ciency and competitiveness of the Canadian capital markets.
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CALGARYSuite 2300355 Fourth Ave. S.W.Calgary, AlbertaT2P 0J1Tel.: (403) 262-6393Fax: (403) 265-4603
HALIFAXTD Centre, Suite 16201791 Barrington St.Halifax, Nova ScotiaB3J 3K9Tel.: (902) 423-8800Fax: (902) 423-0629
MONTRÉALBureau 28021 Place Ville MarieMontréal, QuébecH3B 4R4Tel.: (514) 878-2854Fax: (514) 878-3860
TORONTOSuite 1600121 King St. W.Toronto, OntarioM5H 3T9Tel.: (416) 364-6133Fax: (416) 364-0753
VANCOUVERSuite 1325P.O. Box 11614650 West Georgia St.Vancouver, BCV6B 4N9Tel.: (604) 683-6222Fax: (604) 683-3491
Jon CockerlineDirector, Capital [email protected]
Sherry HumResearch Analyst, Capital [email protected]