Toronto, Jan 20, 2026, 10:42 EST
- Constellation Software will reset the interest rate on its Series 1 debentures to 8.6% on March 31, down from 8.9%.
- The coupon is tied to Canada’s all-items CPI inflation plus a fixed 6.5% spread, and will show up in the June 30 payment.
Constellation Software Inc said the interest rate on its unsecured subordinated floating rate debentures, Series 1, will be reset to 8.6% per year on March 31, trimming the coupon from the current 8.9%. The company said the new rate is based on the annual average change in Canada’s all-items Consumer Price Index (CPI) over the 12 months ending Dec. 31, 2025, plus 6.5%. 1
The reset matters for holders of CSU.DB because the coupon is built to move with inflation, not with overnight interest rates. It also sets the company’s interest bill for another year, a line item investors watch closely when funding costs shift.
Statistics Canada said Canada’s CPI rose 2.1% on an annual average basis in 2025, down from 2.4% in 2024, with lower energy prices helping to cool the overall measure. That 2.1% figure, plus the 6.5% spread, matches the 8.6% rate Constellation disclosed. 2
Inflation readings are still bouncing around month to month. Statistics Canada said CPI rose 2.4% year-over-year in December, after a 2.2% rise in November, while the index fell 0.2% on the month. 3
Economists told Reuters the December report should not force the Bank of Canada’s hand. Andrew Grantham, senior economist at CIBC Capital Markets, said the data were “still consistent with underlying inflation being close to 2%,” while Fitch Ratings director Jessica Hinds called the release “highly unlikely to change the calculus” for the central bank. 4
Constellation’s Series 1 debentures trade on the Toronto Stock Exchange under CSU.DB, while the company’s shares trade under CSU. The company describes itself as an acquirer and operator of vertical market software businesses—software built for specific industries.
A debenture is a corporate IOU. “Unsecured” means the debt is not backed by specific collateral, and “subordinated” means it ranks behind senior debt if a company is wound up.
But the CPI link cuts both ways: if inflation settles lower, the coupon can drop again at the next reset, squeezing income for holders. If inflation re-accelerates, Constellation’s interest cost rises, and the yearly resets can make payments feel jumpier than a plain fixed-rate bond.
Constellation said the new rate will be reflected in the June 30, 2026 interest payment. The company said the coupon will continue to be reset each year on March 31.
