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Wednesday, November 15, 2017
Written by Zita Gombár, Dealogic Research

Foreign corporates like Apple have pushed up Canadian dollar–denominated bonds to a new record with billion-dollar issuances.

Maple bonds grow to record heights

Global issuers have taken advantage of lower interest rates and Canadian investor demand, and made 2017 a record-setting year in the maple bond market. Foreign companies issued C$15.7bn in Canadian dollars so far this year via 15 deals, surpassing full-year 2007 when C$14.3bn was issued via 34 deals. In 2017 YTD, foreign corporates accounted for almost two-thirds of maple volume with C$9.9bn via 8 deals, while the financial sector issued C$5.7bn via 7 deals. Average deal size also set a new record this YTD with C$1.0bn.


Largest Corporate Maple Bonds – 2017 YTD
 Pos.  Issuer Value   Pricing Date Notes
 1 Apple C$2.50bn   15-Aug-17 Debut
 2 AB InBev C$2.00bn   8-May-17
 3 AT&T C$1.35bn   17-May-17
 4 Walt Disney C$1.25bn   3-Oct-17 Debut
 5 McDonald’s C$1.00bn   5-Sep-17


US corporates tap the Canadian market

Average deal size for corporate issuance in 2017 YTD was even higher than the record market average, reaching C$1.2bn thanks to 5 of the 7 C$1.0bn+ corporate maple deals on record being issued in 2017. With their help, maple revenue so far this year totaled C$45m, the highest since full-year 2007 (C$53m).

Global corporates from a variety of sectors chose the Canadian market to raise funds this year. Apple issued in Canadian dollars for the first time, and priced the largest maple bond on record. Walt Disney (C$1.25bn), PepsiCo (C$750m), and UPS (C$750m) also made their debut in the currency this year. Among blue-chip companies, AT&T issued C$1.35bn on the maple market for the first time since 2013, and McDonald’s returned after a long  hiatus with a C$1.0bn deal.

A flavor for issuers and investors

With incentives for both issuers and investors, maple bonds accounted for 18.9% of total Canadian corporate bond volume so far this year, in comparison to only 2.6% in full-year 2016. Interest rates have been lower in Canada than the US for the most of 2017 and companies capitalized on Canadian investor demand as an opportunity to borrow at lower costs. Global corporates have found the maple market attractive for currency diversification, while Canadian investors sought to invest in global household names. They also sought to diversify their bond portfolios, which traditionally lean on financial institutions—a move that may have resulted from concerns around Canadian banks’ exposure to the inflationary housing market


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Data source: Dealogic, Wall Street Journal, as of November 14, 2017