Issuing Bonds: The Canadian Corporate New Issue Market Process

Issuing Bonds is just another way a company can access cash for their business. Documentation and pricing is key to structuring a new issue.
The process for new bond issuing begins when a company, or issuer, decides it wants to access the Canadian debt market.

Why would a company want to access debt markets? There are a multitude of reasons, but one of the most common is that a company needs to replace an issue that is maturing. It might also need cash to pay for a purchase or new project, want to add leverage to its balance sheet, or perhaps repay short-term debt and issue longer-term debt because it likes where the longer-term coupons are.

A company’s decision to issue debt is based on its belief that there’s an available market for that debt. It’s the job of investment dealers to advise companies as to whether that debt could be salable (although as an aside, that advice is not always right!).

The investors who would be interested in purchasing that debt would typically be institutional investors like pension funds, investment councilors, fund managers and hedge funds. These are the largest and most sophisticated debt buyers.

Ratings

4 years ago