Stirrings in the Maple market

The Globe and Mail

The long-dormant Maple bond market showed signs of life last month, as two foreign issuers sold debt denominated in Canadian dollars.

However, fixed income analysts gave a subdued reception to a $155-million bond sale from the Commonwealth Bank of Australia, and a $121-million offering from the International Bank for Reconstruction and Development, or IBRD.

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A robust Maple market all but shut down late in 2007, as the credit crunch began. Fixed income investors revisited the way they looked at risk, and shifted away from debt that required taking a view on both corporate credit quality and currency moves.

In trying to give some perspective to these financings, Desjardins Securities analysts said in a report: "We don't believe these deals are foreshadowing the re-birth of the Maple bond market as they appeared tailored to specific investors with their relatively small sizes and atypical maturities."

The Commonwealth Bank bond was a floating rate note that matures in February, 2013. The IBRD also sold floating rate paper, maturing in 2012.