Canada's banks are back in the debt markets on Tuesday, with Bank of Nova Scotia marketing $1-billion of seven-year notes.
Scotiabank is attempting to sell new bonds at the same price its existing seven-year notes command - a premium of 102 basis points to the comparable government of Canada bond. A trader on one desk described this pricing as a tad aggressive, as recent new issues have been done at a small discount to the price of existing bonds, to entice investors in volatile markets.
Scotia Capital is leading the offering.
On Wednesday, Bank of Montreal sold $2-billion (U.S.) of what's known as covered bonds, which are backed by both the bank and CMHC-insured residential mortgages.
"Canadian banks have increased their activity in the U.S. bond market this year, taking advantage of the fact that the Canadian bank sector as a whole fared noticeably better in the financial meltdown of the past few years than did U.S. and European rivals" said a report on Thursday from Kathleen Shanley at corporate bond research boutique Gimme Credit.