Canada’s high credit ratings entice global investors

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With the sovereign debt crisis in Europe and fiscal challenges in the U.S. casting a pall over the world, investors flocked to Canada as a safe haven last year.

“Money is coming to Canada and for good reason,” says Grant Berry, managing director and head of government finance at RBC Capital Markets. “Typically when international markets buckle a little bit, that’s when you see more participants come to Canada.”

Investment banks helped raise $125.4-billion for Canadian governments and their agencies in 2012. Investors were enticed by Canada’s Triple-A rating.

“The number of Triple-A and Double-A borrowers globally was further reduced last year, making Canada stand out even more,” said Jason Stewart, head of government finance at National Bank Financial. His bank was the leading underwriter of government debt transactions last year, accounting for $27-billion of the total. Of that, $12.3-billion or 45% was raised for the Quebec government, which turns to National Bank as its dealer of choice.

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