Nova Scotia retaps long bonds; Daimler Canada sells euro deal; Canadian Pacific firms

By Cristal Cody

Prospect News, Jan. 9 - Primary activity picked up in Canada on Monday with the Province of Nova Scotia bringing the first bond sale of the year and Enbridge Inc. tapping the domestic market in a preferred stock offering.

Also on Monday, Daimler Canada Finance Inc. raised C$125 million by selling two-year notes in the European market.

The province's bond sale was the "only deal domestically," a syndicate source said. "It's still actually really quiet. Tone's good, just not that much going on with issuers."

Trading also was quiet over the day and flows remained light, according to sources.

The Markit CDX Series 17 North American investment-grade index firmed 1 basis point to a spread of 119 bps.

Canadian Pacific Railway Co.'s Canadian dollar-denominated bonds continue to trade stronger. The bonds were quoted on Monday "in about 30 basis points," a source said.

Bank and financial paper was unchanged on the day.

Government bonds were mixed. Canada's 10-year note yield rose 1 bp to 1.95%. The 30-year bond yield ended unchanged at 2.52%.

Nova Scotia reopens bonds

In primary action in Canada on Monday, the Province of Nova Scotia (Aa2/A+/DBRS: A) priced C$250 million in a reopening of its 4.4% June 2042 bonds at 116.214 to yield 3.526%, a bond source said.

The deal priced at a spread of 100 bps over the Government of Canada benchmark.

CIBC World Markets Inc. was the lead manager.

The province first sold the bonds on May 26, 2011 in a C$300 million offering at 99.631 to yield 4.422%, or a spread of 91 bps over the government benchmark. The issue was reopened on June 28 in a C$300 million offering at 101.046 to yield 4.338%, or a spread of 90 bps.

The total outstanding is C$850 million.

Enbridge sells preferreds

Enbridge brought an upsized C$500 million, or 20 million shares, of 4% cumulative redeemable preference stock on Monday.

The offering was upsized from C$300 million, or 12 million shares, the company announced.

The series F stock priced at C$25.00 per share.

The securities (Baa3/BBB/DBRS: Pfd-2) pay a 4% dividend for the initial fixed-rate period through June 1, 2018.

The stock is redeemable by Enbridge at its option on June 1, 2018 and on June 1 of every fifth year thereafter.

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

Proceeds will be used to partially fund capital projects, to reduce existing debt and for other general corporate purposes.

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

Daimler Canada prices

Also in the market on Monday, Daimler Canada Finance (A3/BBB+/DBRS: A) sold C$125 million 2.5% two-year notes at mid-swaps plus 145 bps, according to a bond source.

The bonds due Jan. 23, 2014 were not offered domestically and priced in the European market.

The bonds are guaranteed by German automaker Daimler AG.

HSBC Capital (Canada) Inc. and TD Securities Inc. were the bookrunners.

The Ontario-based company is the Canadian financing arm for Daimler AG.

Canadian Pacific firms

In secondary trading, Canadian Pacific Railway's 5.1% medium-term notes due Jan. 14, 2022 traded on Monday at 266 bps bid, a source said.

The Calgary, Alta.-based railroad operator sold the notes (DBRS: BBB) in a C$125 million offering on Nov. 29 at a spread of 290 bps over the Government of Canada benchmark.

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