Sumary of Great-West Turns to Growing Loonie Hybrid Debt for U.S. Venture:
- Article content (Bloomberg) — Great-West Lifeco Inc. plans to help finance its expansion in the U.S. by issuing limited recourse capital notes back home, taking advantage of the fast growing market for the Canadian dollar denominated securities first sold one year ago.
- The Canadian insurer is buying Prudential Financial Inc.’s retirement business in the U.S. and aims to raise almost one-third of the $3.55 billion it’s paying by issuing loonie denominated limited recourse capital notes, or LRCNs.
- Article content Canadian banks and insurance companies have issued at least C$11.9 billion ($9.5 billion) of LRCNs since July 2020 when Royal Bank of Canada opened the market by issuing C$1.75 billion of 60-year notes which can be called after five years, Bloomberg data show.
- The attractive coupons amid historically low yields are “part of the equation,” supporting the demand, he said.
- Empire Life Tests LCRNs Debut Amid Yield Hunt In June, Sun Life priced C$1 billion of LRCNs to yield 3.6% after getting an order book of around four times the deal amount, people familiar with the sale said at that time.
- The securities are quoted at a yield of 3.47%, according to Bloomberg bid prices Wednesday.