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US Firms Lead Surge in Maple Bonds as Rates Favor Canada

ACY Canada

Global Borrowers Tap Canada

Foreign issuers from Citigroup to McDonald’s have turned to Canada’s bond market this year, driving issuance of Maple bonds — Canadian dollar debt sold by non-domestic borrowers — to $16.32 billion as of Sept. 25, according to LSEG data. That already surpasses the $13 billion raised in 2024 and edges past the $16.28 billion total in 2023.

Cheaper borrowing costs have been a key draw. “There was just one deal later than another this summer. Rates in Canada have been more attractive,” said Andrew Parker, co-head of the National Capital Markets Practice at McCarthy Tetrault, which advised on NextEra Energy Capital Holdings’ C$2 billion Maple issue, one of the year’s largest.

While the Federal Reserve resumed only this month, the Bank of Canada has been quicker to ease, making Canadian funding more appealing. The January inclusion of Maple bonds in the FTSE Rustrade Index has also broadened demand, according to RBC Capital Markets’ Rob Brown.

Investor Takeaway

Maple bonds are gaining traction as global borrowers exploit Canada’s lower yields and investors diversify beyond U.S. debt markets amid trade policy uncertainty.

Trade Policy Pushes Demand for Non-Dollar Assets

Analysts point to U.S. trade policy as another driver. “That could create enough noise that investors are going to demand products issued in other markets,” said Mike Goosay, CIO and global head of fixed income at Principal Asset Management. Uncertainty surrounding President Donald to rebalance away from dollar assets.

Issuers tapping the Canadian market this year include Citi, New York Life and Pacific Life. U.S. companies are also turning to Europe: dollar-based firms raised a record $100 billion in euro-denominated bonds so far this year, Reuters reported earlier this month.

Demand Remains Strong but Risks Build

Demand for U.S. corporate debt has stayed robust, with spreads on high-grade bonds — the premium over Treasuries — trading near record tight levels. The is expected to reinforce that trend. But investors caution that risks are mounting.

“Broad-based tariffs and the politicizing of core U.S. financial and economic institutions such as the Fed and BLS are causing angst among foreign investors when considering how much exposure to USD assets is appropriate,” said Zachary Griffiths, head of investment grade credit strategy at CreditSights.

U.S. corporate issuance briefly stalled later than announcement before recovering in recent months. Even so, investors warn that a rising could widen long-term yields and challenge appetite for dollar bonds.

Investor Takeaway

Maple issuance reflects both pull factors — lower rates and index inclusion — and push factors, with tariffs and deficit risks prompting caution on U.S. exposure.

Outlook

Maple bonds are on track for a record year as borrowers diversify funding sources and investors viewk non-dollar assets. Whether the trend endures may hinge on U.S. fiscal dynamics and trade policy as much as Canada’s rate environment. For now, the combination of lower Canadian yields and political noise south of the border has made Maple bonds a favored option for global names.

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