Pimco sees Canadian bond sales hitting a hard to reach record
BNN Bloomberg
Sales of Canadian corporate bonds reached a record this year and in 2020, and one of the world’s largest investors expects another high next year. The banks who make a living marketing those bonds say sales volume will be big, but another banner year may be out of reach.
Sales of Canadian corporate bonds reached a record this year and in 2020, and one of the world’s largest investors expects another high next year. The banks who make a living marketing those bonds say sales volume will be big, but another banner year may be out of reach.
Canadian dollar-denominated corporate bond sales, including securitizations, surpassed $135 billion (US$105 billion) this year, according to Bloomberg data. That exceeded $113.5 billion last year, the previous record, and $109.6 billion in 2019.
Pacific Investment Management Co. says 2022 should produce even higher annual sales, led by bonds for expanding growth as the economy recovers from the pandemic, mergers and acquisitions and for climate and digital initiatives.
“We expect to see a fairly strong year for deal-making both large and small,” said Vinayak Seshasayee, a portfolio manager overseeing Canadian fixed-income assets at Pimco. “So we would expect that would also be a robust source of supply of corporate debt. Capex for next year will be strong, not only as a part of reopening, but also as a part of several other big shifts that are going on in the economy.”
Bankers at some of the largest debt arrangers in the country, including Royal Bank of Canada, National Bank of Canada, HSBC Holdings Plc and Bank of America Corp., agree debt financing will be in demand. Several say sales volume, however, is likely to drop from the 2021 record and be closer to that seen the prior two years.
