The following sections highlight the OFA’s results in 2003-04 and its priorities for 2004-05.

Capital Markets

Responsibilities

The Capital Markets division is responsible for the execution of the Province’s borrowing program and debt management activities. It also manages the legal requirements and securities commission filings relating to debt issuance, as well as managing relations with investors and the investment community.

Results in 2003-04

The OFA completed long-term public borrowing of $25.4 billion for the Province and on behalf of OEFC. This amount includes $14.9 billion of debt maturities and redemptions and $6.2 billion from the interim deficit.

Ontario’s bond issues were well received by both retail and institutional investors worldwide. By far, Canadian investors comprise the largest investor base for Ontario, followed by investors in the United States. European and Asian investors also purchase Ontario bonds.

In 2003-04, $18.7 billion, or nearly three-quarters of the Province’s long-term public borrowing requirements were completed in the Canadian domestic market. The OFA employed a wide variety of financing approaches aimed at meeting investor demand. For instance, the OFA raised $7.1 billion through 14 Domestic Medium Term Notes (DMTNs), which were broadly targeted to domestic investors. Also, $4.5 billion in Floating Rate Notes (FRNs) were issued at cost-effective rates, and $900 million was raised through the Province’s first amortizing bond. As well, two bond auctions totalling $1.0 billion were completed on behalf of OEFC. Finally, the Ontario Savings Bond (OSB) campaign, aimed at retail investors in Ontario, raised $3.8 billion.

While the majority of the borrowing was completed in the domestic market, Ontario also diversified its funding sources by raising the equivalent of $4.6 billion in foreign currencies, achieving funding costs below those available in the Canadian domestic market.

The OFA launched its first global bond denominated in Euros, and also issued three U.S. dollar global bonds. Euro Medium Term Notes (EMTNs) in Canadian dollars, Australian dollars, Swiss francs and Japanese yen were issued, along with the Province’s first Hong Kong dollar bond. A yen loan was also entered into by the Province.