The B.C. government's first foray into the Euro-bond market was fully subscribed by a German asset manager who acquired the €40-million (C$ 56.4 million equivalent), 27-year issue, Finance Minister Kevin Falcon announced today.

The offering follows the minister's successful European investor tour earlier in October and meeting with the investor, and continues a trend set earlier this year with other B.C. bond offerings receiving strong interest from European investors.

Purchase of this long-dated security shows the strong confidence European investors have in B.C. and its fiscal management approach.

This most recent bond offering resulted in significant savings to B.C. taxpayers. Swapping the Euros into Canadian dollars generated a saving of about 11 basis-points compared to the Province's domestic cost of borrowing, which translates into a saving of $1.67 million over the term of the bond.

In this fiscal year to date, the Province has borrowed US $2.25 billion from the global bond market in 5- and 10-year terms. Each issue received a strong favourable response from investors due to the high value placed on the B.C. AAA credit rating and its reputation for sound fiscal management and economic performance.

Falcon travelled to continental Europe and London earlier this month to brief investors on B.C. as a safe harbour for investment encourage participation in major capital projects and private sector opportunities that will drive job creation in the decade ahead. Investor interest was sparked by the uncertainty they face at home and B.C.'s favourable and credit story.

Quick Facts:

• B.C.'s strong fundamentals enable it to borrow at significant savings. The Province currently borrows at 30 to 35 basis points lower than Ontario in the US dollar market.
• B.C. is one of only a few provinces able to issue in U.S. dollars at a rate that generates savings on debt servicing costs when swapped back into Canadian funds (compared to its domestic cost of borrowing).
• Diversification of the Province's investor base generates debt service cost savings for taxpayers and provides access to liquidity for financing important government programs which is especially difficult in fragile capital markets.
• Based on our past global bond offerings, the take-up by European investors could represent up to 25 per cent of a provincial issue.
• In reconfirming B.C.'s AAA credit rating, Standard and Poor's noted the Province has the solid revenue and expenditure flexibility necessary to achieve a balanced budget by 2013-14 and to manage its tax-supported debt burden.

Contact:

Jamie Edwardson
Communication Director
Ministry of Finance
250 888-0021