Bell Canada, Westcoast Energy, British Columbia tap markets; others prep note offerings

By Cristal Cody

Prospect News, Nov. 29 - Bell Canada, Westcoast Energy Inc. and the Province of British Columbia all brought deals on Monday to strong demand in the investment-grade and provincial bond markets, sources said.

In new deals, Plenary Health Hamilton LP and Paramount Resources Ltd. are expected to price their offerings on Tuesday, sources said.

The primary market is expected to stay active until mid-December, a source said Monday.

"It should be fairly steady up until the window closes around Christmas," a source said. "Anyone trying to fund right now has a tight window."

Canadian government bonds rose slightly, while U.S. Treasuries rallied on Monday on news of a European bailout package for Ireland over the weekend.

The Canadian 10-year government bond yield fell to 3.088% from 3.13%. Canada's two-year bond yield eased to 1.663% from 1.68%.

Treasuries rallied on the long end, with the yield on the 10-year note down 5 bps to 2.82%. The two-year note yield fell 1 bp to 0.51%.

Bell Canada now C$1 billion

On Monday, Bell Canada, Canada's largest telecommunications company, priced C$1 billion of 3.6% series M-21 medium-term debentures due Dec. 2, 2015 at 99.832 to yield 3.637%, a source said.

The debentures, upsized from C$700 million, priced at a spread of 124 bps over the Canada government benchmark bond, tighter than guidance of 127 bps.

The debt is guaranteed by Montreal-based parent company BCE Inc.

Proceeds will be used for general corporate purposes, including to pre-fund debt repayments.

BMO Nesbitt Burns Inc., CIBC World Markets Inc. and National Bank Financial Inc. were the bookrunners.

Westcoast Energy prices

Westcoast Energy sold C$250 million of 3.28% medium-term notes due Jan. 15, 2016 at 99.913 to yield 3.298% on Monday, according to an informed source.

The notes (DBRS: A) priced at a spread of 89.4 bps over the Government of Canada benchmark bond. Price talk on the notes was a spread of 90 bps, plus or minus 3 bps.

The notes have a Canada call at 22 bps over the Canadian government benchmark.

Scotia Capital Inc. was the bookrunner.

Proceeds will be used for general corporate purposes, which may include repayment of debt and financing capital expenditures and investments.

Calgary, Alta.-based Westcoast Energy processes natural gas throughout Western Canada. The company is a subsidiary of Houston-based natural gas firm Spectra Energy Corp.

British Columbia sells notes

In the provincial bond market, British Columbia sold C$600 million in a reopening of its 3.7% 10-year benchmark notes at 99.699 to yield 3.736% on Monday, an informed source said.

The notes due Dec. 18, 2020 priced at a spread of 64 bps over the Government of Canada benchmark bond.

National Bank Financial Inc. was the bookrunner.

The issue now has C$1.7 billion total outstanding.

Tim Horton's wraps sale

In a deal completed over the U.S. Thanksgiving holiday, Tim Horton's, Inc. sold C$100 million in a reopening of its 4.2% senior unsecured notes due June 1, 2017, a source said.

Tim Horton's priced the notes (DBRS: A) at 102.273 to yield 3.802%, or a spread of 104 bps over the Government of Canada benchmark bond on Thursday. Price talk on the notes was the Canada benchmark plus 105 bps, plus or minus 2 bps.

"We were pleased with the strong market support for our reopening of the senior seven-year notes, and our ability to take advantage of historic low rates to refinance our maturing debt," Cynthia Devine, the company's chief financial officer, said in a news release.

RBC Capital Markets Corp. and Scotia Capital Inc. were the bookrunners.

The issue now has a total of C$300 million outstanding.

Proceeds will be used to refinance the remaining portion of the company's existing term debt set to mature in February.

The Oakville, Ont.-based company is Canada's largest publicly traded restaurant chain.

Plenary Health on tap

Coming up in new supply, Plenary Health Hamilton plans to price C$373.6 million in a two-tranche sale on Tuesday, an informed source said.

The offering includes C$115.3 million of notes due 2013 with price talk of a spread of 130 bps over the Canada benchmark bond and C$258.3 million in amortizing notes due 2043 at guidance of 225 bps over the benchmark.

RBC Capital Markets Corp. is the lead manager of the sale. The co-managers are TD Securities Inc., National Bank Financial Inc. and BMO Nesbitt Burns Inc.

Plenary Health Hamilton is a new 830,000 square foot mental health care facility under construction by St. Joseph's Healthcare Hamilton in Hamilton, Ont.

Paramount Resources sets talk

Also on Tuesday, Paramount Resources is expected to sell C$250 million of senior notes due 2017 (/B+/) with an 8¼% area yield, an informed source said.

Scotia Capital and BMO Nesbitt Burns are the joint bookrunners. RBC Capital Markets is the co-lead manager.

The notes come with three years of call protection, as well as a three-year 35% equity clawback and a 101% poison put.

Proceeds will be used to purchase and/or redeem the company's 8½% senior notes due 2013, to repay bank debt, for capital expenditures and for general corporate purposes.

Paramount Resources is a Calgary, Alta.-based oil and natural gas exploration, development and production company.

Canadian Satellite Radio eyed

Looking ahead to deals in the new year, Canadian Satellite Radio Holdings Inc., the parent of XM Canada, plans to sell about C$130 million of senior notes, according to a Monday press release.

The proceeds will be used to help fund the all-stock merger of equals of XM Canada with Sirius Canada Inc.

The transaction is subject to approval by Canadian Satellite Radio's shareholders (other than Sirius XM and its affiliates) at a special meeting expected to be held in February.

Paul A. Harris contributed to this review

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