The Globe and Mail reports in its Thursday edition that the Canadian market for the
riskiest corporate bonds is
disappearing.
A Bloomberg dispatch to The Globe reports that sales of high-yield bonds issued
in the Canadian currency have
slowed to just one $250-million (Canadian)
offering this year, compared with
seven issues worth $1.45-billion (Canadian)
in 2014. "The market's at risk of dying
or fading away," said Geof Marshall,
who oversees about $9-billion (Canadian)
of high-yield bonds at CI
Investments. More borrowers, as a result, are seeking funding south of the border. Bellatrix Exploration
went to the United States to sell $250-million (U.S.) of 8.5 per cent unsecured notes to reduce its
borrowing from a bank credit
facility. Company spokesman
Steve Toth said a factor in deciding
to sell U.S. dollar debt was
that more than half of the company's
shareholders live in the
United States.
Brookfield Residential Properties has been the lone borrower
this year in the Canadian
high-yield market, selling $250-million (Canadian) in debt
through a private placement in
May.
Also turning to the U.S. is ATS Automation
Tooling Systems. It plans to issue $250-million (U.S.) of
notes due 2023.
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