Ontario Fair Hydro Bonds Offer Fat Yield, Political Baggage
- ‘Craven attempt’ to disguise mismanagmenent, fund manager says
- A way of sharing the cost of going green, government says
This article is for subscribers only.
Sometimes even a juicy yield offered by a government-backed issuer at a time of near-record low interest rates isn’t enough to entice some bond fund managers.
That’s the case of Fair Hydro Trust, a complicated piece of bond-market engineering designed to finance cuts to Ontario’s soaring hydro bills by adding as much as C$20 billion ($15 billion) in long-term debt. The program, unprecedented in Canada, has been lambasted by the province’s accounting watchdog and spurned by asset managers like Jeff Herold of J. Zechner Associates, who’s passed on buying the securities.