Jump to content

[Canada] Where to park ~$10 million for an undetermined length of time?


Otsog
 Share

Recommended Posts

Hi all,

 

The organization I work with recently received ~$10 million.  A portion of the funds may have to be returned depending on the outcome of a court case.  The timeline of the resolution of the case is not known, but could be anywhere from months to 2+ years. 

 

I'm looking for advice on our investment options or any other issues I should take into account.  I'm assuming based on the amount, CDIC limits mean our best option would be AAA Government Bonds?

 

TIA,

 

OTSOG

 

Link to comment
Share on other sites

Followup, if we decide to go with AAA Canada bonds like the below, how many different bonds should the $10 million be spread over?

 

http://i.imgur.com/nViOv0Q.png

 

Why not laddered short term canadian bonds spread between now and 2 years?

 

BeerBaron

Link to comment
Share on other sites

If you could get better GIC rates from big 5 better than Gov't Canada bonds you may as well go for it in excess of CDIC limits. Believe me, if one of the big 5 goes tits up you'll have much bigger problems than a haircut on your 10 mil.

 

The problem is whether you can get the GICs. They're basically a retail product and don't take in 10 mil deposits.

Link to comment
Share on other sites

Why not laddered short term canadian bonds spread between now and 2 years?

 

BeerBaron

 

By laddered do you mean just buying a bit of all the ones posted, or is that a different product?

 

If you could get better GIC rates from big 5 better than Gov't Canada bonds you may as well go for it in excess of CDIC limits. Believe me, if one of the big 5 goes tits up you'll have much bigger problems than a haircut on your 10 mil.

 

The problem is whether you can get the GICs. They're basically a retail product and don't take in 10 mil deposits.

 

Ya, I looked at the posted GIC rates at a couple of bank sites, they are pretty awful from what I found.  I think your right re: CDIC not being a major concern.

 

Safe to assume that your company doesn't have a line of credit that it could pay down? Or are you forced to segregate the funds?

 

Less than $2 mill LTD at 2.7%.  The plan is to segregate the funds as any repayable amount will have to be repaid with actual interest earned.

Link to comment
Share on other sites

Why not laddered short term canadian bonds spread between now and 2 years?

 

BeerBaron

 

By laddered do you mean just buying a bit of all the ones posted, or is that a different product?

 

 

Yeah, I mean something like 800k in 60 days duration, 800K in 120 days duration, etc.. as your 1st bond expire you roll it over to 2 years.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...