Flocking to the Safety of... Loonies?
Hey, it's not such a bad idea. The Canadians still have a housing bubble that's yet to burst and are way more level-headed than their neighbors to the South that are issuing record amounts of debt just to keep up with our new Socialist way of life.
A drop in the euro to near its lowest level in four years means Canadian dollars and Swiss francs are accounting for record shares of global bond sales as investors flee turmoil in Europe’s government debt market.
General Electric Co.’s financing arm has led C$5.66 billion ($5.5 billion) of bond sales this month, 10.5 percent of total global issuance and double the currency’s share in May, according to data compiled by Bloomberg. Issuance in Switzerland’s currency jumped to 3.08 billion francs ($2.7 billion), or 5.1 percent of sales, from 1 percent the previous month, as companies including Bayerische Motoren Werke AG of Munich tapped the market.
Borrowers are seeking alternative funding sources to avoid markets directly affected by collapsing confidence in the euro region’s ability to contain soaring deficits. Bond offerings in all currencies other than U.S. dollars and euros totalled $15 billion, or a record 29 percent of the $51.2 billion issued, double the proportion of a year ago, Bloomberg data show.
So maybe ratings are important after all?