Enbridge sells C$300 million; Calloway REIT prices 5% bonds; Canadian credit weaker

By Cristal Cody

Tupelo, Miss., Sept. 23 - Two deals priced in the Canadian corporate bond market as rates continued to fall on Thursday, sources said.

Enbridge Inc. sold C$300 million in two tranches of bonds, a source said.

The pipeline operator priced $200 million of 10-year notes at a spread of 144.3 bps over Canadian government benchmark bonds for a yield of 4.266%, the source said.

The company also priced $100 million of 30-year bonds at a spread of 170 bps over the Canadian government bond due 2037 for a yield of 3.42%.

The bonds traded "a bit better" in the secondary market, a source said.

"The longs are about a basis point better and the 10-years traded as tight as 141," the source said.

Calloway sells bonds at par

Also in the market on Thursday, Calloway Real Estate Investment Trust sold C$100 million of debt.

The company priced the 5% bonds due 2019 at par, according to a source.

The deal was geared toward the retail market, a trader said.

"That was about 232 versus the curve," the trader said. "The bonds cleaned up fairly quickly."

Canadian Imperial Bank of Commerce was the lead bookrunner.

The Vaughan, Ont.-based REIT invests in retail shopping centers in Canada.

Rogers' notes firm

Elsewhere in the corporate bond market, the new debt sold on Wednesday from Rogers Communications Inc. firmed in the secondary market, a trader said.

Rogers Communications priced C$900 million of 4.7% 10-year senior notes (DBRS: BBB) at a spread of 185.2 bps over the Canadian government benchmark bond.

"They're now trading at 182, so about 3 basis points tighter on the bid side," the trader said. "They traded as tight as a bid of 178."

The Toronto-based company provides wireless voice and data communications, cable television, internet and telephone services in Canada.

Government bonds rally

Canadian government bond yields continued to drop in line with U.S. Treasuries.

The 10-year yield fell to 2.834% from 2.85%. The two-year note yield ended at 1.412% from 1.41%.

"Rates are a bit lower, stocks were a little bit weaker today," a source said.

"Credit in general in the U.S. is a bit weaker. Canada was unchanged this morning, but it's a little bit weaker this afternoon by a couple of basis points."

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