Alberta failed to reach its sales target with its recent capital bond issue, raising $74.5 million. The target had been $100 million.
“It’s being viewed as a success,” said Alberta Finance spokesman Nick Kaczmarek. “The $100 million was a target. We were hoping to raise up to [that] but we’re happy with the $74.5.”
It’s been 13 years since the province issued capital bonds and Albertans might not have been used to the idea, Kaczmarek said.
“It’s a possibility that people were not willing to lock themselves in for five years right now with interest rates thought to be going up,” he added.
The money raised will be used to build seniors’ accommodations in the province but projects have yet to be identified, Kaczmarek said.
The bonds were on sale from Feb. 16 to March 1, which was also the deadline for making RSP contributions for the 2009 tax year. The timing might have worked against the province, said Mike Dickinson, spokesperson for Servus Credit Union.
“During RSP season there’s a lot of products out there,” he said.
Many financial institutions, including Servus, brought out their own products to match the government’s 3.3 per cent bond rate, Dickinson said.
The bonds were only available to Alberta residents. Some likely responded to the idea of investing in their province but those focused purely on return had lots of options.
“There’d be a lot of competing messages in the marketplace that might have diluted what [the government] were looking to achieve,” Dickinson said.
