Scotiabank, Brookfield sell dollar deals; Canadian Western Bank, Enbridge price in Canada

By Cristal Cody

Prospect News, Dec. 11 - Canadian deal action expanded on Tuesday across the border with deals in the U.S. investment-grade and high-yield markets, while the pipeline stayed busy domestically with offerings from Enbridge Income Fund Holdings Inc., Canadian Western Bank and the Province of Quebec, according to market sources.

In the U.S. markets, the Bank of Nova Scotia sold $1 billion of five-year senior notes, and Brookfield Residential Properties Inc. priced an upsized $600 million issue of eight-year senior notes.

In the Canadian high-grade market, Enbridge Income Fund raised C$500 million in a two-tranche offering of medium-term notes.

Both tranches traded 3 basis points to 4 bps tighter later in the secondary market, a source close to the deal said.

Canadian Western Bank tapped the domestic market with an offering of C$250 million of subordinated debentures.

In the provincial market, Quebec sold C$500 million in a reopening of its 4.25% medium-term notes due 2043.

"There was some selling today," a bond source said of the day's session.

New issuance "feels like it's starting to wind down a little bit, though I wouldn't shocked to see another bank deal," the source said.

The Markit CDX Series 18 North American investment-grade index firmed 2 bps to a spread of 94 bps.

The Markit CDX Series 18 North American high-yield index closed up at 101.33 from 100.81.

Government bonds fell over the day. Canada's two-year note yield rose 2 bps to 1.08%. The 10-year note yield climbed 3 bps to 1.73%.

Bank of Nova Scotia prices

The Bank of Nova Scotia priced $1 billion of 1.375% five-year senior notes on Tuesday to yield Treasuries plus 77 bps, a market source said.

The notes (Aa1/AA-/) were sold at the tight end of talk in the Treasuries plus 77 bps to 83 bps range.

Pricing was at 99.889 to yield 1.398%. There is a call option at par plus accrued and unpaid interest on or after Nov. 18, 2017.

Active bookrunners were Barclays and Scotia Capital USA Inc. Bank of America Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were passive bookrunners.

Senior co-managers were Morgan Stanley & Co. LLC, Goldman Sachs & Co., HSBC Securities (USA) Inc., UBS Securities LLC and Wells Fargo Securities LLC.

RBS Securities Inc. and Standard Chartered Bank were the co-managers.

Proceeds will be added to the bank's funds and used for general business purposes.

The financial services company is based in Toronto.

Brookfield sells $600 million

Brookfield Residential Properties priced an upsized $600 million issue of eight-year senior notes (B2/BB-) at par to yield 6½% on Tuesday, according to a syndicate source.

The yield printed at the tight end of the 6½% to 6¾% yield talk.

The deal was upsized from $500 million after having been previously upsized from $400 million.

Credit Suisse Securities (USA) LLC, Citigroup and JPMorgan are the joint bookrunners.

Proceeds, including proceeds from the upsizings, will be used to refinance debt.

Brookfield is a Calgary, Alta.-based land developer and homebuilder.

Enbridge sells two tranches

Enbridge Income Fund (Baa2/DBRS: BBB) priced C$500 million of medium-term notes in two tranches on Tuesday, an informed source said.

The fund sold C$225 million of 2.92% series 9 notes due Dec. 14, 2017 at 99.982 to yield 2.924%, or a spread of 160 bps over the interpolated Government of Canada bond curve.

The second tranche of C$275 million of 3.94% series 10 notes due Jan. 13, 2023 priced at 99.981 to yield 3.942%, or a spread of 215 bps over the bond curve.

BMO Capital Markets Corp., CIBC World Markets Inc., HSBC Capital (Canada) Inc. and National Bank Financial Inc. were the lead managers.

Calgary, Alta.-based Enbridge Income Fund focuses on investments in energy infrastructure assets. The fund brought a C$200 million offering of two-year floating-rate senior medium-term notes on Nov. 26 at par to yield 100 bps over three-month CDOR.

Canadian Western Bank prices

Canadian Western Bank (DBRS: A) raised C$250 million in an offering of 3.463% subordinated debentures at par on Tuesday, an informed bond source said.

The debentures priced at a spread of 195 bps over the interpolated Government of Canada bond curve.

The issue is due on Dec. 17, 2024 and is redeemable on Dec. 17, 2019 at par. If the bonds are not redeemed, the coupon will pay a floating rate of three-month CDOR plus an undisclosed spread.

BMO Capital Markets and RBC Capital Markets were the lead managers.

The Edmonton, Alta.-based bank last tapped the Canadian debt markets on Sept. 10 with a C$300 million offering of 2.378% three-year deposit notes that priced at par, or a spread of 110 bps over the Government of Canada benchmark.

Quebec sells C$500 million

The Province of Quebec (Aa2/A+/DBRS: A) priced a C$500 million add-on to its 4.25% medium-term notes due Dec. 1, 2043 at 113.227 to yield 3.543% on Tuesday, according to an informed bond source.

The notes priced at a spread of 121.5 bps over the Government of Canada benchmark.

National Bank Financial Inc. was the bookrunner.

The province first sold the notes in a C$500 million offering on Aug. 12, 2011 at 103.875 to yield 4.034%, or 97 bps over the government benchmark.

The province last tapped the issue on Oct. 11 with a C$500 million offering that priced at 112.165 to yield 3.597%, or 116.5 bps over the Government of Canada benchmark. The total outstanding is C$6 billion.

Andrea Heisinger and Paul A. Harris contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.