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Gadi Mayman, Chief Executive Officer CEO’s Corner
Province of Ontario Borrowing Program Update
May 28, 2010

Hello and welcome to the CEO’s Corner. I’d like to welcome returning viewers, and most especially, I’d like to say a “hello” to those new viewers who are viewing the CEO’s Corner for the first time.

What I’d like to do in the next couple of minutes is give you a bit of an outline of where the Province’s borrowing program is going and how we’re doing.

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The first thing I want to talk about today are Ontario Savings Bonds. Starting on June 1st, we are going to be launching the 16th annual campaign for Ontario Savings Bonds. This year we’ve got a couple of new features. We’re going to have a 7-year and a 10-year fixed rate bond. We hope that we’ll be able to attract investors who are looking for a little bit more yield and are willing to invest for a longer term. It’s a really exciting product and I ask all of you who are residents of Ontario who are eligible to buy Ontario Savings Bonds to take a look at our website, which is OntarioSavingsBonds.com, and you’ll see, starting on June 1st, what the rates are. The campaign lasts until June 21st, and I encourage you to look at that website.

Ontario Savings Bonds make up one part of the Province’s domestic borrowing program. As many of you are aware, we’re aiming to complete at least 50 per cent of this year’s borrowing in the domestic market.

Let’s talk a little bit about markets because they certainly have been very tumultuous. Yes, we have been very very fortunate in that Ontario has almost unparalleled access to the markets globally. We have been issuing in a wide variety of currencies both domestically and internationally.

Since our fiscal year started less than two months ago, we have already issued $8.8 billion, or 22 per cent – almost a quarter of our program – in that two month period. We borrowed $3.8 billion in the domestic market, which is about 43 per cent of our borrowing, and
$5.0 billion in the international markets.

As I just mentioned, we’re looking at, by the end of the year, having slightly more in the domestic market than the international, but because of the timing, we’re a little bit ahead now. We’ve been very fortunate with being able to access large size in international markets. As I said in my last CEO’s Corner, we look around the world at opportunities to borrow cost-effectively for the Province.

We have since our Budget in March, borrowed in a variety of currencies – in U.S. dollars, in Norwegian kroner, Hong Kong dollars, Swiss francs and the one that I want to talk about right now is Japanese yen, where just yesterday, we issued over 130 billion yen in a combination of 5- and 10-year terms. This is one of the largest transactions for an international borrower in the yen market in recent times. It just shows the access that we have to the marketplace.

It’s very important that we maintain that access from our perspective, and in order to do that in these challenging markets, we’re looking at being a little bit more flexible and taking more foreign exchange exposure, for limited periods of time, than we have in the past. As many of you who have been followers of the CEO’s Corner or have watched how Ontario borrows, you’ll know that while we’re allowed to have up to five per cent of our portfolio exposed to foreign exchange, we’ve recently been close to zero per cent, and we may look at expanding that as we go forward, still within a very very small band, in order to give us more flexibility as we look at international markets and look at the ability to bring things back home to Canada cost-effectively.

Going forward, as I said, we’ll continue to look at a variety of international markets. In the domestic market, we’ll continue to issue single or dual tranche issues.

We’ve been very successful this year in issuing in 10-, and particularly, 30-year bonds, and again this morning, we were able to issue a $600 million 30-year bond, again, into very volatile markets and see remarkable pick up of those transactions.

We remain flexible and committed to ensuring that the balance between investors’ interests and Ontario taxpayers’ needs are met as best we can.

Thank you for spending a couple of minutes listening to what I have to say. I hope that you remain very interested in the Ontario borrowing program and continue to contribute to that program, either as an investment dealer or as an investor. It’s very important for us to continue to move forward with the borrowing program as quickly, cost-effectively and efficiently as possible.

Again, if you’d like to provide feedback, please send comments by clicking on the “Contact Us” button at the top of the screen and I’ll try to incorporate your comments in my next CEO’s Corner. And I’d also like to remind you, if you’d like to subscribe to receive notification of new issues, fiscal and economic updates and any future CEO’s Corners, please click on the “Subscribe” button above to register. Thank you very much for your time.