Wells Fargo among corporates selling bonds

San Francisco-based lender raises a billion Canadial dollars’ worth of seven-year bonds

Canada’s finance minister Bill Morneau gave a gloomy economic assessment related to the spreading coronavirus. Photograph: Darryl Dyck/Bloomberg

Canada’s finance minister Bill Morneau gave a gloomy economic assessment related to the spreading coronavirus. Photograph: Darryl Dyck/Bloomberg

 

Wells Fargo is among three issuers raising 2.15 billion Canadian dollars (€1.5 billion) in the busiest day for loonie corporate bond sales so far this year as Canada’s finance minister Bill Morneau gave a gloomy assessment related to the spreading coronavirus.

The San Francisco-based lender raised C$1 billion of seven-year bonds, according to people familiar with the matter. Metro issued C$400 million of 30-year debt in its first issue since 2017 while Bell Canada priced C$750 million of bonds of a similar maturity.

It’s the first time this year that three corporate bonds are being priced on the same day, according to Bloomberg data. Royal Bank of Canada priced the largest transaction so far this year on January 24th when it raised C$2.25 billion by selling senior bail-in bonds due in seven years.

Risk spreads in the Canadian corporate bond market are at 103.5 basis points, similar to the levels seen at the end of last year, according Bloomberg Barclays indexes. Spreads remain resilient even as the virus outbreak is raising concerns of a global slowdown due to the break-up of supply chains as well as contraction of demand for commodities such as oil, a key Canadian export.

On Monday, Morneau warned the spread of the virus from China is expected to have a “significant” impact on global growth that will spillover into Canada as it disrupts tourism and supply chains. – Bloomberg