Canada Issues First 50 Year Bond
This week the Government of Canada issued it’s first 50 year bond at an interest rate of 2.96%! It sold $1.5 billion at double the minimum target. If this isn’t an indication of low stable interest rates for an extended period of time then we can’t think of anything else that is. This was a rare issuance,
Large insurance and pension funds likely feasted on the issue because it takes care of a matching objective that they need to fulfill for managing risk. This type of event almost makes us at Mortgage Logic want to recommend the shortest of the short term rates until further notice, i.e. a floating or variable rate, in order to maximize savings on debt.