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Goldman Surprises Canadian Market With Maple Bond Redemption

  • Bank says it will redeem C$500 million in fixed-floating bonds
  • Market was pricing for debt to switch to lower float rate
Updated on

Goldman Sachs Group Inc. handed a surprise gift to bondholders in Canada this week by redeeming debt sooner than investors had expected, and some money managers are betting that other banks will follow its lead.

The New York-based bank said Tuesday that it was redeeming all of its C$500 million ($380 million) in subordinated notes maturing in April 2022 for a price equal to principal plus accrued interest. The bonds jumped by about 1.76 cents to as much as 100.376 cents on the news. The move was unexpected after JPMorgan Chase & Co. opted not to call similar bonds last year, said Mark Carpani, a portfolio manager at Ridgewood Capital Asset Management.