The Canadian commercial paper market is a key source of short-term financing to support the ongoing needs of a wide range of firms and public authorities. The Commercial Paper Purchase Program (CPPP) supports the flow of credit to the economy by alleviating strains in Canada’s commercial paper markets.
Commercial paper purchases will be conducted by TD Asset Management (TDAM) on behalf of the Bank of Canada.
Terms and conditions
See the full terms and conditions for this program.
Dealers wanting to use the CPPP should provide the name of their key contact for the program .
The program will begin on April 2, 2020 and will operate for 12 months.
Any of the following issuers with an outstanding Canadian dollar-denominated commercial paper program:
- Canadian incorporated firms
- Canadian municipalities
- Canadian provincial agencies
Eligible issuers should access the program through their dealers.
The program will purchase commercial paper, including asset-backed commercial paper, in the primary and secondary market, with a tenor of up to 3 months of sufficiently high quality, broadly equivalent to a minimum short-term credit rating of R-1 (high/mid/low).
The maximum amount of a single issuer’s commercial paper that the program may hold at any time is limited to 1.25 times the greatest amount of CAD-denominated commercial paper that the issuer has outstanding on any day in the 12 months prior to the start of the program. The program will not purchase additional commercial paper from an issuer whose total commercial paper outstanding to all investors (including the program) equals or exceeds the program issuer limit described above.
All purchases will be on a fixed rate basis set daily. The rate will be based on a spread above a reference rate, based on the current 3-month Canadian overnight index swap (OIS) rate. The spread will differ based on the credit rating of the issuer and will be updated as required in the table below at 4:00pm ET daily for the following day. The 3-month OIS rate will be determined by TDAM based on the rate posted at 11:00 ET on the Bloomberg CDSOC ticker. The Bank reserves the right to adjust its pricing to meet policy objectives.
|As of date||Rating||Spread to OIS|
|April 2, 2020||R-1 High or R-1 Mid||130 basis points|
|April 2, 2020||R-1 Low||160 basis points|
The Bank expects issuers to be able to access the program without any fees being charged by the dealer.
The Bank reports its aggregate holdings of commercial paper acquired through this program every Friday on the Bank’s weekly balance sheet. The first results of this program will be reported on April 10, 2020.
The Bank will publish transaction-level data from this program, including the names of individual issuers purchased, on June 29, 2021. This is in line with the Bank’s commitment to be transparent while protecting commercially sensitive information and trade-specific detail that could impact the effectiveness of these programs, lead to market distortion or impact the fair market value of the Bank’s purchases while these programs are operational.
Head of Fixed Income
TD Asset Management
Financial Markets Department
Bank of Canada