Canadian debt issuance hit record in second quarter

By Greg Dalgetty | September 8, 2020 | Last updated on September 8, 2020
1 min read
hand pulling financial business graph to high growth rate
Dusit Panyakhom / 123RF

Canadian governments and corporations issued $521 billion in debt securities during the second quarter, according to data from Statistics Canada.

The federal government issued an “unprecedented” $302.3 billion in debt securities — more than five times greater than the previous record of $55.8 billion set during the global financial crisis.

The borrowing activity mainly occurred in April as the government was scrambling to prop up businesses and households impacted by Covid-19.

Corporations were also net borrowers of funds in the second quarter, StatsCan reported.

The financial sector issued a total of $128.6 billion in debt securities. Non-financial corporations issued $26.9 billion in debt securities, led by the transportation and warehousing, manufacturing and utilities sectors.

StatsCan reported that the total outstanding value of Canadian debt securities hit a record high of $5,034.6 billion at the end of Q2, a $471.6-billion increase from the previous quarter.

Canadian corporations retired a total of $6.7 billion in equity securities during the quarter, marking the third consecutive quarter in which retirements exceeded new issuances. Professional, scientific and technical service firms contributed the bulk of net retirements during the quarter.

The market value of Canadian-listed equities reached $2,812.6 billion at the end of Q2, up $388.6 billion from the previous quarter thanks to rallying equities markets.

Greg Dalgetty