Canada Begins First U.S.-Dollar Bond Sales Since Pandemic

This country plans to sell bonds in the U.S. dollar market for the first time since the start of the pandemic as the North American country’s vaccination campaign gradually gains pace amid a third wave of the virus.

Canada will be selling five-year bonds in the first benchmark-sized transaction in the currency since January 2020. The bonds, which were priced Tuesday, are being marketed at around eight basis points over U.S. Treasurys, according to people familiar with the matter.

Our economy is expected to grow 6.1% this year, up from a 5.4% decline in 2020. The survey sees the U.S. economy, Canada’s largest trade and investment partner, expanding by 6.3% in 2021 after a 3.5% contraction in 2020. Even as the economy recovers, Canada’s jobs market hit a snag in April as a third wave of lockdowns and COVID-19 restrictions led to job losses.

While vaccinations in Canada have more than doubled in the last month to over one-third of the population with a first dose, just around 3% are fully vaccinated.

Canada’s bond deal is also the first transaction in the U.S. dollar currency since Fitch Ratings downgraded it to its second highest investment-grade level, citing higher public debt ratios.