Yankee Bonds

Description
Yankee bonds are bonds issued by provincial governments or Canadian corporations that provide income in U.S. dollars. They are backed by the full faith and credit of the issuing provincial government or corporation.

Objective
To provide regular taxable semi-annual income in U.S. dollars.

Suitability
Yankee bonds are suitable for income-oriented investors who would like to receive income in U.S. dollars.

Features

• Safety: They are backed by the full faith and credit of the issuing provincial government or corporation and the provincial government's ability to levy and collect taxes.
• Income: Income is paid semi-annually.
• Liquidity: These bonds can be sold on any business day at their current market value. This may be equal to, more or less than the amount originally invested.
• Price Changes: While the amount of your interest cheque will always remain the same, the value of your bond will change daily.
• Currency Risk: If you have a need for U.S. dollars, you will not need to exchange the interest payments or principal amount as they are already made in U.S. dollars. You will have exchange risk if you need to convert back into Canadian dollars.
• Tax Status: Income from these bonds is fully taxable unless held in a qualified retirement plan.
• RRSP Eligible: These issues are RRSP eligible. Since they are issued from a Canadian province or corporation, in most cases, they will not count against foreign content.

For more information, please contact your Edward Jones financial advisor*.