The TD Securities Maple Bonds Roundtable

The Maple bond market grew with extraordinary speed between 2004 and 2007, when issuance peaked with about C$22bn of deals being printed in the first six months alone. The market had grown from being the backwater of Canada’s bond market to making up about 30% of its supply. Borrowers such as Bank of America, JPMorgan and HBOS were among the biggest issuers. Even Lehman Brothers and Icelandic banks got a look in. The feeling was that the market would not stop. Then came the financial crisis. The Maple market tanked, all but grinding to a halt. Spreads widened sharply as Canadians dumped foreign paper in favour of better known and, at least as far as they were concerned, safer domestic credits. The market got back on its feet last year. US insurer MetLife printed a C$200m ($176m) two year floater in June, while Commonwealth Bank of Australia issued C$300m of five year paper in October. The success of that deal led another Australian bank, Westpac, to price a C$400m bond shortly after, the biggest Maple of the year. Bankers and investors are confident the market will move on further this year. Financial institutions are again likely to be among the biggest borrowers. But sovereigns, supranationals and agencies could also be in the mix. But for that to happen investors will still have to diversify from domestic triple-A debt, such as National Housing Act (NHA) mortgage-backed securities (which are insured by the Canada Mortgage and Housing Corp).