Income-hungry investors are being served up $2.5-billion worth of bonds over lunch hour, as Canada Housing Trust moves to set the price on its latest debt offerings.
The federal government agency is marketing two global deals that will be priced on Wednesday, one fixed rate and the other at a floating rate. The financings backstop residential mortgage loans from Canadian banks and credit unions.
Canada Housing Trust is selling $1.475-billion of fixed rate bonds that come due in 2020, and that debt will be sold at a 43 basis point premium to the comparable government of Canada bond, despite carrying the same triple-A credit rating.
There is also a floating rate issue being marketed, with a minimum targeted size of $1-billion.
These financings are being led by BMO Nesbitt Burns, Bank of America/Merrill Lynch, RBC Dominion Securities and Scotia Capital.
As part of a push to win a global following for Canada mortgage bonds, underwriters have applied to list this debt on Luxembourg Stock Exchange, and plan to have the issue trade in European markets.