Bond markets mostly quiet; Nexen sells preferred stock; Epcor firms; Teck mixed in trading

By Cristal Cody

Prospect News, Feb. 27 - Canadian financial markets started the week mostly quiet on Monday with light activity over the day, sources said.

Nexen Inc. was in the market with an offering of C$150 million of preferred stock.

"Not too much today," a syndicate source said. "We did see very busy trade flows toward the end of last week, but it's pretty quiet today."

The Markit CDX Series 17 North American high-grade index firmed 1 basis point to a spread of 95 bps.

The new 30-year senior debentures that Epcor Utilities Inc. priced in a C$300 million offering on Thursday in the domestic market traded about 2 bps better on Monday, a source said.

"The long end is holding in," the source said.

Canadian issuer Teck Resources Ltd.'s long bonds are trading 5 bps wider in the U.S. high-grade market from where they priced earlier in the month, a trader said.

Government bonds edged lower on the day. Canada's 10-year note yield rose 1 bp to 2%. The 30-year bond yield edged up 1 bp to 2.62%.

Nexen sells preferred stock

Nexen said Monday that it sold C$150 million of preferred stock (DBRS: Pfd-3) to yield a dividend of 5% annually for the initial period ending March 31, 2017.

The company sold 6 million cumulative redeemable class A rate reset preferred shares, series 2, at C$25.00 per share.

TD Securities Inc. and Scotia Capital Inc. were the lead managers.

The deal includes an over-allotment option of C$50 million, or 2 million shares.

Nexen may redeem the shares on March 31, 2017 and on March 31 of every fifth year thereafter.

Proceeds of the offering may be used to reduce debt, for capital expenditures and for general corporate purposes.

Calgary, Alta.-based Nexen is a global energy company.

Epcor firms

In the secondary market, Epcor Utilities' 4.55% senior debentures due Feb. 28, 2042 traded at 188 bps on Monday, a source said.

The company sold C$300 million of the 30-year debentures at a spread of 190 bps over the Canadian government benchmark.

Epcor is an Edmonton, Alta.-based utility company.

Teck mixed

Teck Resources' two tranches sold in a $1 billion offering of senior notes (Baa2/BBB) on Feb. 16 were mixed in U.S. high-grade trading.

The company's 3% notes due 2019 are trading tighter at 160 bps bid, 155 bps offered, but flat over the day, a trader said. The company sold the tranche in a $500 million offering at 165 bps over Treasuries.

Teck's 30-year bonds widened to 215 bps bid, 205 bps offered. The bonds priced at a spread of 210 bps over Treasuries.

The diversified mining company is based in Vancouver, B.C.

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