Effective: May 30, 2025
This document presents the operational details pertaining to reopening off-the run Government of Canada (GoC) nominal bonds.
1. Reopening off-the-run GoC nominal bonds
Objectives
- The program seeks to promote and maintain the well-functioning of the GoC bond market by increasing the supply of individual bonds that meet the eligibility criteria.
- Should the Bank and GoC consider that an off-the-run bond is displaying characteristics that conflict with well-functioning markets, the Bank may, on behalf of the GoC, provide additional primary supply of that bond. These characteristics may include frequent lending through the Bank’s Securities Lending Program, persistently exhibiting repo or cash richness, and/or an exceptionally low trading volume.
- The program is intended to address structural tightness from concentrated holdings of specific ISINs, including those held by the Bank.
- This program will employ the same terms and conditions as those used for auctions of GoC nominal bonds.
Timing
- Operations are held at 12:00 on weekdays, as announced in the Quarterly Bond Schedule, and on separate dates from other bond auctions.
Eligible Bonds
- A GoC bond that1:
- Has a remaining term to maturity exceeding 18 months;
- Is deemed to have met the criteria to merit additional primary supply. Such a determination will be based on various factors, including the following:
- The bond has a low free float amount.
- The bond has been frequently lent out through the Bank’s Securities Lending Program.
- The bond has been displaying persistent specialness in repo markets.
- The bond has been displaying persistently low trading volumes in secondary markets and/or persistent richness relative to the curve driven by structural factors.
Reopening Amount
- Each operation will typically range in size from $0.5B to $1.5B, with flexibility to go higher if merited.
- Once an operation is announced, the security will be reopened even if market dynamics self-correct.