Research Reports

Market Musings - September 2020 - TD Securities
The Next Rung on the Yield Ladder: Looking at Canadian Municipal Bonds 
Andrew Kelvin

"We see 30yr Muni-Provi spreads as fair at current levels; adding Municipal bonds looks like an attractive way to enhance returns for investors who are broadly constructive on spread product, subject to liquidity constraints." 

Public Sector Debt - May 2020 - National Bank 
Market View – Setting the record straight (on municipal finances)
Warren Lovely

"Across the municipal sector, liquidity ends up being quite a consistent and significant credit strength. Exceptional liquidity is equally a core underpinning for BCMFA, which is more akin to an infrastructure bank and shares many key similarities with top-rated SSAs in the Nordic region, Japan and elsewhere. In normal times, local governments don’t typically draw on their abundant stores of liquidity, but when push comes to shove (or rather, when a virus infects your local economy) they can and will use cash balances, short-term funds, other reserves, credit lines and short-term borrowing facilities to meet their obligations."

Special Report - May 2020 - CIBC
Canadian Municipalities during COVID-19
Maria Berlettano & Tom Bognar

"We highlight that on April 28, Fitch confirmed MFABC's AAA rating with ‘Stable’ outlook citing “the authority's independent and essentially unlimited taxing power, minimal operating risks, carefully matched assets and liabilities, and strong liquidity position.” Fitch also goes on to say that “MFABC retains abundant liquidity to address potential demands and to bridge timing 95.5% 96.0% 96.5% 97.0% 97.5% 98.0% $- $1,000,000,000 $2,000,000,000 $3,000,000,000 $4,000,000,000 $5,000,000,000 $6,000,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Own Purposes Taxation and Grants in Lieu (LHS) Taxes Collection Rate (RHS) CIBC Capital Markets | FICC Strategy 3 May 5, 2020 www.cibcmacro.com Although Canadian municipalities are mostly funded in the domestic markets and in domestic currency, participation among international investors has been growing. gaps until revenues from the unlimited property tax can be collected.”

Tools / Resources

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Credit Reports

Every year the MFA presents to 3 credit rating agencies to access the lowest rate possible for our clients.  Here are their findings.

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Annual Reports