Debt financings were down by almost a quarter in Canada last year, according to the Investment Industry Association of Canada.

The latest data from the IIAC shows that $157 billion was raised in debt financings for 2008, a decrease of 24% from the previous year. A slowdown in corporate borrowing accounted for most of the decline, it said. In the fourth quarter, total debt issuance was $29.4 billion, down 16% from the third quarter.

The IIAC observed that bond issuance by Crown corporations was the bright spot during the year, with financings up 18% to a record $44.1 billion. However, Government of Canada bonds raised just $20.1 billion for the year, a decrease of 27%, and corporate bond issuance was down to $56.9 billion, down 43% from 2007. Notably, Maple bond issuance went from almost $27 billion in 2007 to less than $1 billion in 2008.

Bond trading volume was also down, with only $6.1 trillion traded in 2008, off by 13% from the previous year, it reported. Money market trading volumes were down 44% year over year “as liquidity dried up in the commercial paper market”. However, money market trading volumes did increase by 13% in the fourth quarter, largely due to increased trading in Canadian T-bills, the IIAC said.

IE