(Bloomberg) -- Quebec raised C$500 million ($381 million) by tapping its existing 2.75 percent bond due in 2028 in the first sale of long-term debt by a Canadian province in two weeks.
Canada’s second-most populous province sold the bonds at a relative yield of 59.5 basis points over federal government bonds, according to data compiled by Bloomberg. That’s the lowest spread of the nine offerings of these bonds, which were first sold in April.
This is the first sale of bonds by a Canadian province since Oct. 25, when Ontario issued 10-year notes, as the risk premium investors demand to hold the securities jumped to a six-month high amid a global bond sell off. The spreads tightened this month as the supply of new bonds slowed and investors’ risk aversion declined.
Quebec Finance Minister Eric Girard, who was sworn in last month, told reporters on a conference call Friday that the government of Premier Francois Legault is committed to balancing the budget this fiscal year after reporting a C$2.99 billion surplus through August.
Girard warned the surplus will likely be temporary because he expects revenue growth -- and the province’s economy as a whole -- to slow in the next few months. Girard said he will provide an economic update by the end of December.
As of Sept. 10, Quebec had completed about 81 percent of its C$13.4 billion borrowing program for the current fiscal year ending March 31, according to a statement on the finance ministry’s website. Quebec is also considering a sale of bonds due December 2051, a press officer for the province said last month.
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