RBC sells $1.5 billion; Paramount upsizes; Cominar REIT, Enbridge price; Inmet rises

By Cristal Cody

Prospect News, Nov. 29 - Canadian issuers continued to keep the primary calendar active on Thursday with bond deals across the investment-grade and high-yield markets.

"It's been non-stop deal-o-rama," one informed source said.

The Royal Bank of Canada tapped the U.S. market on Thursday with a $1.5 billion offering of three-year covered bonds. The issue came late with traders not seeing any immediate secondary activity.

In the high-yield market, Paramount Resources Ltd. priced an upsized C$300 million of seven-year senior notes at par to yield 7 5/8% on Thursday.

The notes "are trading up a half point," a bond source said.

Another source saw the notes at 100.25 bid in late day trading.

In Canada's investment-grade market, Enbridge Inc. came with a C$350 million offering of 10-year medium-term notes in a late afternoon deal on Thursday.

"Tone's good," a syndicate source said. "People want to get stuff in before the Christmas break."

Cominar Real Estate Investment Trust also tapped the high-grade market with an offering of C$200 million of 4.23% seven-year senior debentures at par on Thursday.

The deal was "well-subscribed," one source said. "It narrowed down in secondary trading, at least 5 basis points tighter."

The day's offerings follow a heavier issuance week for Canada, most likely attributed to "some Dec. 1 coupon spending," a bond source said.

In other market activity on Thursday, Inmet Mining Corp.'s 8¾% eight-year senior notes (B1/B+/) traded up 3 points on the day to 108 bid, 109 offered, a trader said.

The Toronto-based base metals mining company said in a news release late on Wednesday that it rejected an unsolicited takeover offer of C$70.00 a share from Vancouver, B.C.-based First Quantum Minerals Ltd.

"They opened this morning at 106, 108," the trader said. "The last I saw, they were 108, 109."

Inmet Mining sold the notes on May 15 in a $1.5 billion U.S. dollar-denominated offering at 98.584 to yield 9%.

No immediate trading activity was seen in First Quantum Minerals' 7¼% senior notes due 2019 (B1/B+/BB) late in the day. First Quantum Minerals sold $350 million of the notes on Oct. 4.

Corporate bonds traded better on Thursday.

The Markit CDX Series 18 North American investment-grade index came in 2 bps to a spread of 99 bps.

The Markit CDX Series 18 North American high-yield index rose to 99.67 from 99.62.

Government bonds traded mostly flat on the day. Canada's 10-year note yield fell 1 bp to 1.71%. The 30-year bond yield ended unchanged at 2.30%.

RBC sells $1.5 billion bonds

The Royal Bank of Canada was in the market Thursday with a $1.5 billion sale of three-year covered bonds (Aaa//AAA) priced at mid-swaps plus 20 bps, an informed source said.

The notes sold in line with price guidance in the mid-swaps plus 20 bps area.

Full terms of the trade were not available at press time.

Bookrunners were Citigroup Global Markets Inc., RBC Capital Markets LLC and UBS Securities LLC.

The financial services company is based in Toronto.

Paramount sells C$300 million

Paramount Resources sold an upsized C$300 million of seven-year senior notes (Caa1/B/) at par to yield 7 5/8% on Thursday, in line with previous guidance, an informed bond source said.

The notes due Dec. 4, 2019 priced at a spread of 617 bps over the Government of Canada benchmark.

The deal was upsized from C$250 million.

The notes priced in the Canadian provinces except Quebec and as a private placement in the U.S. market.

RBC Dominion Securities Inc., Scotia Capital Inc. and BMO Nesbitt Burns Inc. were the lead managers.

The notes are guaranteed by the Calgary, Alta.-based oil and natural gas developer's restricted subsidiaries.

The issue has a 101% change-of-control put and a Canadian call at 100 bps over the Government of Canada benchmark.

The issue is non-callable for three years.

Proceeds will be used to repay debt under the credit facility, for capital expenditures and for general corporate purposes.

Enbridge prices 10-year notes

Enbridge (Baa1/A-/DBRS: A) sold C$350 million of 3.19% 10-year medium-term notes in a late afternoon deal on Thursday at 99.932 to yield 3.198%, an informed source said.

The notes due Dec. 5, 2022 priced at a spread of 143 bps over the interpolated Government of Canada bond curve.

TD Securities Inc., Scotia Capital and RBC Capital Markets Corp. were the lead managers.

At the start of the week, Enbridge raised C$400 million in an offering of preferred shares due June 1, 2019. The issuer last sold bonds in Canada on Aug. 22 when it priced C$400 million of 4.24% 30-year medium-term notes.

Enbridge is a Calgary, Alta.-based oil and gas distributor and transportation company.

Cominar REIT sells debentures

Cominar Real Estate Investment Trust (DBRS: BBB) priced C$200 million of 4.23% seven-year senior debentures at par on Thursday, according to the company and syndicate sources.

The series 2 debentures due Dec. 4, 2019 priced at a spread of 273 bps over the interpolated Government of Canada bond curve.

National Bank Financial Inc. and BMO Capital Markets Corp. were the lead managers.

Proceeds will be used to repay amounts outstanding under the company's credit facilities, thereby replacing short-term debt with longer-term debt.

The trust last tapped the Canadian debt markets on Sept. 11 with a C$125 million reopening of its 4.274% debentures due June 15, 2017.

Quebec City-based Cominar REIT owns office, retail and industrial properties in Canada.

Andrea Heisinger contributed to this review

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