TRANSCRIPT

February 14, 2019 — Q3 2018–19 Quarterly Ontario Finances

Hi, I’m Gadi Mayman, CEO of the Ontario Financing Authority. Thank you for joining me for the next few minutes.

With the release of the Province’s 2018–19 Third Quarter Finances yesterday, I would like to take this opportunity to provide you with an update on the borrowing program.

Let’s start with the release of the Third Quarter Finances.

As reported in the Third Quarter Finances, the Province’s deficit for 2018–19 is now $13.5 billion, an improvement of $1.0 billion from the forecast in the 2018 Fall Economic Statement, and $1.5 billion from the baseline for planning provided by the Independent Financial Commission of Inquiry in its report. This is largely due to an increase of $1.0 billion to the revenue outlook, reflecting higher household spending and stronger business profits.

The net debt-to-GDP ratio is now projected to be 40.4% in 2018–19, 0.1 percentage points lower than the 40.5% forecast in the Fall Statement.

Reflecting the improvement in the projected deficit, the total funding requirement for this fiscal year is forecast to be $1.0 billion lower than anticipated in the Fall Statement.

As such, Ontario’s borrowing program is well ahead of pace. To date, we have borrowed $35.5 billion, or $3.3 billion more than was required to complete the 2018–19 borrowing program.

Subject to market conditions, the Province will continue to borrow over the remainder of this fiscal year. All long-term borrowing issued between now and March 31, 2019, will be used to continue to increase the Province’s cash reserves, and, thereby, lower the amount that will need to be borrowed next fiscal year.

Speaking of the borrowing program.

Canadian dollar borrowing currently totals $26.5 billion, or 75% of the borrowing completed, which is roughly in line with the Province’s target of completing approximately 70% of this year’s borrowing program in Canadian dollars.

This was primarily through domestic syndicated issues, floating rate notes and a new Green Bond issue — which I’ll provide more details on later.

The remaining $9.0 billion, or 25% of this year’s program, includes foreign currency issues in Euros, U.S. dollars, and Australian dollars.

As in previous years, the U.S. dollar market has remained an important source of funding for Ontario, accounting for $6.6 billion, or 19% of our total borrowing this fiscal year.

I’d like to highlight our most recent U.S. dollar global issue completed in January. The 5-year $2.5 billion deal was our second U.S. dollar transaction for fiscal 2018–19. The trade was highly successful, with 92 buyers participating in the trade and a final book size in excess of $4 billion.

Now I’d like to turn to Green Bonds.

As committed in the 2018 Fall Statement, the Province has realigned its Green Bond program to support the government’s approach to addressing environmental challenges.

At the end of January, we issued a $950 million re-opening of our February 2025 Global Green Bond. The transaction represents the fifth Green Bond offering from Ontario, currently the largest issuer of Canadian dollar Green Bonds, with a total of $4.0 billion issued and $3.5 billion outstanding.

The transaction was met with strong demand with 57 investors participating in the trade and books growing in excess of $1.2 billion. Investors with Green mandates and/or UN PRI signatories represented over 84% of total sales.

To conclude:

You can find further fiscal and economic information on the Third Quarter Finances on the Ministry of Finance’s website. You can also find updated borrowing information on our Investor Relations Fact Sheet, posted on this website.

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Thank you very much for your time.