Canadian bond issuers have been active in the kangaroo market for some years. The Province of Ontoria issued AUD-denominated bonds just over a week ago while other Canadian government Province of Manitoba and Province of British Columbia are also regular issuers in the market. Banks such as Toronto Dominion and the Canadian Imperial Bank of Commerce each raise funds in the Australian market from time to time.
Another Canadian is about to join them. Bank of Montreal, part of the BMO Financial Group, has announced it has just launched its inaugural kangaroo bond transaction. Westpac is the joint lead manager and bonds will be issued in one or more tranches which will be either fixed or floating or both. Initial guidance for the deal was 95bps over each tranche’s respective swap rates.
It already has bonds denominated in U.S. dollars, euros and sterling and the Canadian loonie, of course. Soon Aussie dollars will be added to the list.
Group revenue was in the order of USD$19 billion in 2016 while total assets amounted to around USD$500 billion, so it is not much smaller than the major banks in Australia. (For instance, ANZ Group has assets of around USD$730 billion). Bank of Montreal senior debt is rated A+ by S&P and A1 by Moody’s.