Britain in May is great for a sports fan, for garden enthusiasts and for theatre goers — though speaking personally, July is even better.

Canadian borrowers have found attractions in other areas and through those efforts have located a group of willing fixed-income investors interested in buying well-rated paper.

This week, two Canadian provincial borrowers joined the parade. On Wednesday, Manitoba priced a GBP250 million offering that came with a 0.875 per cent coupon and a 4 and ½ year term. Earlier in the week, the province of Quebec priced a GBP 300 million five-year benchmark offering.

Those two were following the lead set by Ontario which earlier in May raised GBP 400 million via a deal with a 3-1/2 year term and which pays a floating rate coupon based on British Libor. That deal was also a benchmark offering.

Alberta was the first province to borrow in that market this year: in February it raised 650 million pounds of senior unsecured bonds maturing in November 2021. That offering was the first in that market by Alberta, which at the time indicated its interest in returning. The province said it has a goal of raising 30 per cent to 40 per cent of its borrowing needs outside of Canada, with the bulk of that presumably coming from the U.S.

Here’s one way to put those GBP 1.95 billion of provincial borrowings into perspective: in 2016 no Canadian province raised debt capital in sterling. But the Export Development Corp., a federal agency, was in the market on four occasions raising GBP700 million. It also raised GBP250 million (for 4-1/2 years) in January 2017. (Two banks, CIBC and Royal as well as EDC, have also borrowed GBP this year.)

So what’s at work? Bradley Meiers, head of debt capital markets at HSBC Securities (Canada) said the issuance by Canadian provinces is an overall reflection of how things have rebounded in the sterling market since it became largely off limits following last June’s Brexit vote.

“After that vote it was not the best place to issue,” noted Meiers, whose firm played has played lead manager and book running roles on three of the four provincial issues, those by Manitoba, Quebec and Alberta.

But over the last few months, Meiers said “things have definitely turned around.” That opening up of the market meant borrowers could tap into a new group of investors — meaning they achieve the benefits of diversification — as well as raising capital on an cost-effective basis.

For the provincial borrowers the goal is to achieve an all-in cost of capital (in C$ terms once the proceeds are swapped) that is lower than what a similar issue in their home market would cost.

Welcoming $500 million of client assets

A combination of push and pull factors has meant that Raymond James Ltd., the local arm of the U.S. based investment dealer Raymond James Financial has landed its largest investment adviser recruit.

This week the firm indicated that Webber, Brodlieb & Associates, had joined. That team, which spent many years at BMO Nesbitt Burns — Webber has been around for 35 years, having worked with his father — oversees the management of more than $500 million of client assets.

As for the move, the team noted the new employer’s “unique culture that celebrates and nurtures independent advice and personalized solutions for clients,” that was also non bureaucratic.

Of late, some bank-owned brokerage firms have reduced the pay-out grid, have cut staff who don’t reach a certain level of production and encouraged more client sales at the bank branch level.

Financial Post
bcritchley@postmedia.com