Quebec Green Bond Offers Snapshot of Canadian Market Potential

(Bloomberg) -- Province of Quebec’s C$500 million ($376 million) green bonds to be priced later today received indications of interest to cover the deal almost six times, according to people familiar with the transaction.

The book of potential orders exceeded C$2.75 billion one day after the Canadian province announced the transaction, said people who asked not to be named before the deal is completed. Should all investors confirm their orders, it would be largest demand seen by Quebec since it started selling green bonds in 2017, according to government data.

The strong demand is allowing Quebec to price their green bond with zero or slight negative premium over comparable regular securities. The 7-year bond was priced at 48 basis points over Canada’ 1.5% bonds due 2026, tighter than the area of 49.5 initial pricing thoughts communicated Wednesday, the people said.

Bank of Montreal, HSBC Holdings Plc, Bank of Nova Scotia and Royal Bank of Canada are arranging the transaction which will be priced later today. A press official at Quebec Ministry of Finance didn’t provide immediate comment.

To contact the reporter on this story: Esteban Duarte in Toronto at eduarterubia@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Andrew Kostic, Christopher DeReza

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