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Canada bonds

close stronger

TORONTO: Canadian bonds closed higher despite a heavy supply of fresh provincial and corporate issues which hit the market and analysts said more gains are likely over the near term.

"The market did OK today and this is very encouraging given that we had some good supply," said Jim Webber, Managing Director of fixed income research at Tornoto Dominion Securities Inc.

Canada's 9.0 percent of 2025 was up C$0.57 at 103.68 to yield 8.652 percent against the US 30-year at 6.87 percent for a spread of 178 basis points.

Provincially owned Ontario Hydro started a wave of new bonds as it hit the market with a C$500 million issue of 9.0 percent bonds due May 26,2025. The bond sold at a price of 99.177 to yield 9.078 percent, for a spread of 43 basis points over the government's 8.0 percent bonds due 2023.

This was followed by a C$500 million issue by the Canadian Mortgage and Housing Corporation. The 7.75 percent December 2000 bond was priced to yield 7.93 percent, or 15 basis points over.

In the afternoon the province of Saskatchewan set a C$130 million 7.55 percent bonds due November 2, 1998.

The Saskatchewan bonds were priced at 99.684 to yield 7.76 percent or 25 basis points over the 8.0 percent government bond due 1998. The bonds will be dated and delivered on September 11 and will pay interest on November 2 and May 2.

In corporate issues, Royal Oak Mines Inc announced it plans to launch a US$100 million to US$125 million in senior subordinated notes.-Reuter