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Email this9:48 pm
April 6, 2013
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7½ year maturity (December 2029). 2¼% per annum coupon.
Not tempted at all.
10:00 pm
October 21, 2013
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Apparently they were very popular.
I think the rate is low, especially looking forward, but I guess it's guaranteed directly by the federal gov't, not limited to CDIC limits, might be good for large institutional investors who can't take risks.
How does it compare to other government issues? (Just curious; not planning on buying them; 7 years is beyond my limit, no matter what the rate is.)
10:46 pm
April 6, 2013
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The green bonds were issued by the Government of Canada itself.
Yield is about the same as non-green bonds. On Scotia iTRADE, Government of Canada bonds maturing 2029/06/01 have yield to maturity of 2.209%. The ones maturing 2030/06/01 yield 2.253%
10:53 pm
April 14, 2021
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Since EQ bank is offering a 7-yr GIC for 3.2%, why would someone want a bond that seemingly offers less?
Are they hoping for an appreciation in value for the bond?
If bonds can appreciate, then they can just as surely depreciate, no?
11:11 pm
April 6, 2013
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Government of Canada bonds have a DBRS rating of AAA.
The issuer of the EQ Bank GIC's is Equitable Bank which has a rating of BBB, eight notches lower and two notches away from being a junk bond.
11:20 pm
April 14, 2021
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Thanks. So, the first $100K for EQ is okay, but nothing above CDIC limits.
11:26 pm
October 21, 2013
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I don't know if these bonds are tradeable or not. But, if they are, value would likely decrease with rising interest rates if you put them on the market.
Unlike EQ,'s GICs, or any other FI's for that matter, these have no insurance limits and there is no concern about whether CDIC will have enough in its piggy bank to cover them. As long as the Canadian dollar lives, you will get your money back with interest. With that level of security, the interest rate will be lower than any bank, but the question is whether it is acceptable to buyers. Apparently it was very acceptable. Ideal for the fixed income portion of "green" funds and others that need to demonstrate that they are environment-friendly.
From what Norman has reported, it seems the rate is comparable to other bonds issued by gov't of Canada. If you are going to hold government bonds anyway, these have an added selling point.
1:47 pm
September 7, 2018
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Norman1 said
Government of Canada bonds have a DBRS rating of AAA.The issuer of the EQ Bank GIC's is Equitable Bank which has a rating of BBB, eight notches lower and two notches away from being a junk bond.
Home Group (under which Oaken operates) has a BB rating. So I guess you would consider Oaken "garbage" if it were not for CDIC to salvage investors up to 100K.
No wonder why Oaken has to keep increasing its rates above most others.
Same with WealthOne - I could not find any credit rating for W1. Probably too early to assess its track record.
The Big Banks may pay lower rates but their debt ratings are very high. CDIC is a non issue with the Big 6.
2:52 pm
March 15, 2019
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canadian.100 said
Home Group (under which Oaken operates) has a BB rating. So I guess you would consider Oaken "garbage" if it were not for CDIC to salvage investors up to 100K.
The Home Trust debacle is still fresh in my mind.
https://blog.reincanada.com/fallout-from-the-home-capital-debacle/
5:06 pm
April 6, 2013
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canadian.100 said
Home Group (under which Oaken operates) has a BB rating. So I guess you would consider Oaken "garbage" if it were not for CDIC to salvage investors up to 100K.
…
None of the Oaken branded deposits is issued by Home Capital Group. So, its rating is not relevant.
The Oaken deposits are issued by either Home Trust or Home Bank. Home Trust has a BBB(low) rating, just one notch above junk. Home Bank has no rating and its debt would be treated as junk.
When one doesn't have the debt rating of a provincial government or better, one has to try harder to attract deposits, $100,000 or less at a time. One won't have the benefit of large commercial customers parking their $1 million or $10 million of payroll funds calling.
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