Canada Savings Bonds will pay investors six-per-cent interest in the first year, the federal finance department has announced. That yield is down from 7.5 per cent offered last year. The rate of return in the latest issue of bonds, which go on sale this week, will be set annually for each of the next 11 years to maturity. The individual purchase limit for the 1992 series has been increased to $100,000 from $75,000.
THE LOAN ARRANGER
The federal Canada Deposit Insurance Corp. will provide the Toronto-based Toronto-Dominion Bank with $2.5 billion in loan guarantees against losses relating to its bailout of Central Guaranty Trust Co. of Halifax. TD has agreed to pay $125 million for the troubled trust’s 154 branches, $9 billion in assets and all of its deposit liabilities.
A NEW BREAK FOR ENERGY
The government of Alberta has overhauled the royalty structure for oil and natural gas in an attempt to stimulate the provincial energy industry. Under the new structure, the royalty payments from energy producers to the province would be flexible and linked to the current world price of oil and gas rather than be fixed. The provincial government estimated that the changes, the first since the royalty regime was introduced in 1973, will save the industry about $250 million annually by the mid-1990s.
COMPUTING A LOSS
International Business Machines Corp. of Armonk, N.Y. posted its second-largest quarterly loss last week. IBM management blamed the $3.5-billion loss in the third quarter on flat sales levels and financial write-downs related to employee layoffs and plant closures. The company has already frozen corporate spending and is trying to restructure its product line to focus on personal computers rather than mainframe computers.
SAVING THE EC
Leaders of the European Community gathered last week in Birmingham, England, for an emergency session. The principal subject of discussion was how to overcome the mounting national resistance to the Maastricht Treaty on monetary and political union. By week end, the 10 EC members had agreed to limit centralization under the treaty and to work to preserve national identities. The next summit will be held in Edinburgh in December.
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