Canadian Pension Funds' Debt Issuances Continue Steady Growth in 2024, Outlook Remains Largely Stable

This commentary discusses the debt issuances of Canadian pension funds in 2024.

Key highlights include:

-- Canada's pension funds' issuances grew to $41.6 billion in 2024, from $38.6 billion in 2023.
-- The weighted-average coupon and tenor of debt issued by Canadian pension funds in 2024 was 3.993% and 6.6 years, respectively
-- Given their material refinancing needs, we expect the pension funds' debt issuance levels to remain at high levels over the next two years.

"We expect debt issuances to operate within the range of $40.0 billion to $45.0 billion over the next two years," said Ranuj Kumar, Vice President, Global Insurance & Pension Ratings at Morningstar DBRS. "Notwithstanding this incremental debt, we expect the pension funds to maintain conservative recourse debt leverage guidelines, supporting their current credit ratings."