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The government of Canada went looking for a minimum of $750 million Monday when it launched its first ever long bond, meaning a security that matures in 50 years’ time

And it ended up with twice that amount, as institutional investors — mainly pension funds and insurance companies which have need to fund long-dated obligations — piled in. Because of the strong demand the borrower was able to price the offering very near the benchmark issue, the 3.50% Canada bonds maturing on December 1, 2045. The AAA rated bonds that came with a 2.75% coupon and a maturity date of December 1 2064, were reoffered at a yield of 2.96% — or one basis point above the benchmark. The bonds were priced at $94.512 per $100 face value.

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“The current yield environment and strong demand for long-term bonds made for favourable conditions for issuing an ultra-long bond,” said a note issued by the four joint lead managers, BMO Capital Markets, CIBC World Markets, Desjardins Securities, TD

Securities.

And demand was strong. In all the final book size was $2.6 billion with 46 investors showing an interest. Of the $1.5 billion that was allocated, 80% were placed with Canadian investors, 15% with buyers south of the border and the rest in Europe, Middle East and Asia. Of the buyers, 52% were fund managers, 42% were pension funds and insurance companies and 6% were classified as private banks or other.