PTT Exploration studies maple bond deal; Great Canadian Gaming starts roadshow; Baytex up

By Cristal Cody

Prospect News, July 11 - Primary action quieted on Wednesday in the Canadian bond markets, while roadshow activity started to pick up.

"Otherwise, there's stuff going on in the background, but nothing happening in the deal market today," one syndicate source said. "There's still a decent bid to the market."

Thai oil company PTT Exploration and Production PCL kicked off a roadshow on Wednesday for a possible maple bond offering, an informed source said.

"It will be next week's business, assuming a deal comes," the source said.

Price talk emerged Wednesday on the offering of C$150 million secured notes from Golf Town Canada Inc. and Golfsmith International Holdings, Inc.

Also on Wednesday, Great Canadian Gaming Corp. started its roadshow in Canada for a C$400 million senior note offering. The Richmond, B.C.-based gaming, entertainment and hospitality company is expected to continue the roadshow for the notes (B1/BB+/) in New York and Boston on Thursday and Friday and in Toronto in the upcoming week.

Mostly, though, the day was "very slow," another bond source said.

In the secondary market on Wednesday, Baytex Energy Corp.'s 6 5/8% debentures due 2022 traded better, a source said.

"Chances are, it probably was not priced aggressively enough, given that it's up over 2 bucks on the day," the source said.

Also in trading, Bank of Montreal's 2.5% notes due 2017 eased 2 bps on the day.

The Markit CDX Series 18 North American investment-grade index ended unchanged a second day at a spread of 111 basis points.

Canadian government bonds ended lower. The 10-year note yield rose 2 bps to 1.68%. The 30-year bond yield closed 1 bp higher at 2.28%.

Golf Town and Golfsmith talk

Golf Town Canada and Golfsmith International talked their C$150 million joint offering of five-year senior second-lien notes (B/DBRS B low) with a yield in the 9½% area on Wednesday, according to a market source.

The offering, a joint issue which has 70% of the deal being issued by Golf Town and 30% by Golfsmith, is set to price by the end of the present week.

Scotia Capital Inc., TD Securities Inc. and BMO Capital Markets Corp. are the bookrunners. Co-managers are HSBC Capital (Canada) Inc. and National Bank Financial Inc.

The notes are non-callable for two years. In 2014, the notes may be called at par plus ½ the coupon, in 2015 at par plus ¼ the coupon and 2016 and thereafter at par.

The notes have a 101% change-of-control put; an equity clawback of up to 35% in the first two years at par plus the coupon; and a Canadian call at the Canada Bond Yield plus 50 bps.

Proceeds will be used to repay debt, to replace the existing Golfsmith ABL facility and to return capital to shareholders.

The deal comes as Golf Town plans to acquire U.S. specialty golf retailer Golfsmith International for $6.10 a share, an acquisition that will make it the world's largest specialty golf retailer with 143 stores in Canada and the United States.

Markham, Ont.-based Golf Town is owned by Omers Private Equity. Austin, Texas-based Golfsmith is a 40-year specialty golf retailer.

PTT Exploration on road

PTT Exploration and Production (Baa1/BBB+/) plans to hold a roadshow from Wednesday through Friday for a possible maple bond offering, an informed source said.

The company has purchased operations in Canada and is considering financing, the source said.

Scotia Capital Inc. and HSBC Capital (Canada) Inc. are hosting the roadshow.

Bangkok, Thailand-based PTT is a petroleum exploration and production company.

Baytex trades up

In the secondary market on Wednesday, Baytex Energy's 6 5/8% debentures due 2022 traded at 102.125 bid, a source said.

Baytex Energy sold C$300 million of the series C debentures (B1/BB-/) at par, or a spread of 496.8 bps over the Government of Canada benchmark on Tuesday.

Calgary, Alta.-based Baytex is an energy exploration and production company.

BMO eases

In U.S. trading, Bank of Montreal's 2.5% senior medium-term notes due 2017 eased 2 bps to 104 bps, a market source said.

The notes (Aa2/A+) priced on Jan. 6 in a $1.5 billion offering at a spread of 170 bps over Treasuries.

The financial services company is based in Toronto and Montreal.

Paul A. Harris contributed to this review

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