Operational Changes to the Bond Buyback Program

In April 2010, officials from the Department of Finance and the Bank of Canada sought the views of institutional investors, government securities distributors, and other interested parties on issues relating to the management of the cash flow profile of Government of Canada securities over the medium term and on the demand for long-term bonds (nominal and Real Return). The Department of Finance and the Bank of Canada wish to thank all those who participated in the spring consultation process.

In light of comments regarding the cash flow profile of Government of Canada securities received during recent Debt Management Strategy consultations, and with the objective of further smoothing this profile, some changes are being implemented in the bond buyback program:

• Starting in August 2010, the frequency of cash-management bond buyback operations will be increased on a pilot basis. As a result, cash-management bond buyback operations will be conducted on most Tuesdays.
• Bond buyback operations on a switch basis covering short-term to medium-term bond maturities are planned for the remaining of the current fiscal year.
• The existing $3 billion repurchase threshold for large, off-the-run issues will be removed. The repurchase threshold of $3 billion will remain in place for cash-management bond buyback operations.

Accordingly, the document entitled Details on Bond Buyback Operations, posted on the Bank of Canada website, has been updated and changes will be effective on 5 July 2010.

For further information, please contact:

Assistant Director
Funds Management and Banking Department
Bank of Canada
613 782-7836

Chief, Debt Management Policy
Financial Markets Division
Department of Finance
613 992-6116