In addition to the existing providers, CIBC World Markets and RBC Capital Markets, the new participants are BMO Nesbitt Burns Inc., Casgrain & Company Limited, Laurentian Bank Securities Inc., Merrill Lynch Canada Inc., and TD Securities Inc.
Dealer pricing will be combined into a single blended price, which will be calculated at end of day, for each index bond. These blended prices will be used to calculate the S&P/TSX Canadian Bond Index levels. The participation of a broader range of price providers will provide market participants with a more accurate measure of the performance of the Canadian bond market. In a market where exchange-traded pricing information is unavailable, blended prices for a broad spectrum of Canadian government and corporate bonds will aid the price discovery process by providing a more representative gauge of security valuation.
“The participation of the new price providers, coupled with the independence and objectivity of the S&P/TSX Canadian Bond Index, gives asset managers and other financial professionals a more valuable performance benchmark for the Canadian fixed-income market,” said Steve Rive, Vice President of Canadian Index Services at Standard & Poor's.
“Today’s announcement further demonstrates the growing acceptance in the marketplace of Canada’s first independent, multi-dealer-priced fixed-income index and truly paves the way for the development of bond index-linked investment vehicles,” he added.
Background information regarding today’s announcement is contained within a document titled “Pricing Coverage of The S&P/TSX Canadian Bond Index”. Information about how the blended price will be calculated is detailed in the S&P/TSX Canadian Bond Index Methodology. Both documents are available at www.canadabondindices.standardandpoors.com. S&P/TSX Canadian Bond Index data is offered by TSX Datalinx. For more information about features and pricing visit www.tsx.com/bondindices or contact TSX Datalinx Subscriber Services at 416-947-4452 or marketdata@tsxdatalinx.com.
S&P/TSX Canadian Bond Index
Numbering 903 issues with a total market value of over C$637 billion on Feb. 28, 2006, the S&P/TSX
Canadian Bond Index is designed to broadly represent the market performance of investment-grade bonds
issued by Canadian companies and by issuers in the government sector. Calculated daily and rebalanced
monthly, the Index is a market value-weighted average of total bond returns which can be divided into over
300 standard sub-indices based on credit rating, issuer, maturity and industry sector (Corporates). Industry
sectors are based on the widely accepted Global Industry Classification Standard (GICS®) maintained
jointly by Standard & Poor’s and MSCI, permitting direct comparison between equity and fixed income
sectors in Canada and around the world.
The S&P/TSX Canadian Bond Index is the first index of its kind in Canada to feature multi-dealer pricing for index-valuation purposes as a bond must have a minimum of two price providers to be eligible for inclusion in the Index. Governed by a published, rules-based methodology, the Index is maintained by the S&P/TSX Canadian Bond Index Committee. The S&P/TSX Canadian Bond Index reflects user needs through consultation with a broadly representative Advisory Panel, which includes a variety of members of the investment community. For more information about the methodology and governance of the S&P/TSX Canadian Bond Index visit www.canadabondindices.standardandpoors.com.
About Standard & Poor’s
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider
of independent credit ratings, indices, risk evaluation, investment research, data and valuations. With
approximately 6,300 employees located in 20 countries and markets, Standard & Poor's is an essential part
of the world's financial infrastructure and has played a leading role for more than 140 years in providing
investors with the independent benchmarks they need to feel more confident about their investment and
financial decisions. For more information, visit www.standardandpoors.com.
