Quebec-based pension giant Caisse de dépôt et placement du Québec said Friday it will issue up to $8 billion in bonds in Canada, the U.S. and Europe by the end of 2010 depending on market conditions.
The proceeds of the refinancing will be used to replace certain short-term credit instruments with longer-term debt to increase the stability of its financing.
Moody’s Investors Service says that the the Caisse’s plan to issue $8 billion in debt doesn’t have credit rating implications.
The rating agency said that there are no rating implications associated with CDP Financial, Inc.’s recently announced $8 billion medium-term debt issuance program. CDP is a wholly-owned subsidiary of the Caisse, which is used to raise funds for its operations, predominantly through short- and medium-term borrowings.
“The Caisse’s announcement of up to $8 billion in incremental medium-term funding does not hold any rating implications because the issuance will not fundamentally alter the Caisse’s capital structure,” explains Moody’s senior vice president, Peter Routledge.
“Moody’s understands that the Caisse will use the proceeds to retire short-term borrowings such as commercial paper, and that board limits on aggregate borrowing size remain within our expectations at its current rating level. Thus its net debt load will not increase. Moreover, the Caisse’s liquidity profile should improve as a consequence of extending the term of its funding,” he adds.
CDP’s ratings are based on the Caisse’s strong liquidity and a very low ratio of secured and unsecured debt to gross assets, which totaled $187 billion at year-end 2008, Moody’s notes.
Caisse to issue up to $8 billion in bonds as part of refinancing
Proceeds will be used to replace short-term credit instruments with longer-term debt
- By: The Canadian Press
- November 13, 2009 November 13, 2009
- 09:45