(November 30 – 17:30 ET) – The Government of Canada will be proceeding with a bond buyback program for cash management purposes.

The program is designed to reduce the peak levels of government cash balances needed to redeem large upcoming maturities of Government of Canada marketable bonds. The government will review whether the program should be made permanent based on the this pilot program, which will be conducted in January 2001.

On behalf of the government, the Bank will buy back bonds with less than 12 months to maturity. It will target bonds that mature on dates where the total amount of bonds outstanding is greater than $6 billion. The outstanding amount maturing on any given target date will not be reduced below the $6 billion threshold by these buyback operations. Specific details of each buyback operation will be announced approximately one week before it starts.

The program will target whole bonds rather than the underlying components. Government Securities Distributors and customers with their own bidder identification number will be eligible to participate in the program. The Bank will accept a maximum of five offers per targeted bond from each GSD.

The deadline for submitting offers will be 10:30 ET on the day of the operation. The bidding results will be released 30 minutes after the bidding deadline. The results will include the amount of each bond bought back, the new outstanding amount of each bond and the cut-off yield for each repurchased bond.

Buyback transactions will be settled on a cash basis and the repurchased bonds will be cancelled.