Export Development, Financement-Quebec, Enbridge lead deal action; Tuscany wraps roadshow

By Cristal Cody

Prospect News, Nov. 27 - Canadian deal action jumped on Tuesday in the domestic markets and across the border, with one offering from Enbridge Pipelines Inc. believed to have priced with the lowest 10-year note coupon in 12 years, sources said.

The day's largest offering came from Export Development Canada, which sold a U.S. dollar-denominated $1 billion offering of five-year notes.

In Canada, Financement-Quebec brought a C$500 million reopening of its 2.45% seven-year medium-term notes early on Tuesday, an informed source said.

By late afternoon, Enbridge Pipelines tapped the corporate bond markets for C$150 million of the 2.93% 10-year medium-term notes.

"That was the maximum size they needed," a source close to the sale said. "We believe it's the lowest coupon for a 10-year corporate since at least 2000."

The regulated utility priced the notes on top of guidance at a spread of 113 basis points over the interpolated Government of Canada bond curve.

"They're a basis point tighter going into the close but there's really not a lot of trading going on; it's a pretty small deal," a source said.

First Capital Realty Inc. also came late afternoon with an upsized C$150 million offering of 10-year senior debentures.

The day's action continued past the market close. Toronto-based Hydro One Inc. sold C$50 million of floating-rate notes due Dec. 3, 2016 to yield three-month CDOR plus 37 bps, an informed source said.

"That came at 4:30 and caught everyone by surprise," one source said.

Also in Canada on Tuesday, Manulife Financial Corp. priced C$200 million of non-cumulative rate reset class 1 series 11 preferred shares.

In the high-yield market, Calgary, Alta.-based Tuscany International Drilling Inc. talked its $200 million offering of senior notes due 2019 as the company wrapped up its roadshow on Tuesday.

On Wednesday, Paramount Resources Ltd. is expected to complete its three-day Canadian and U.S. roadshow for an offering of C$250 million of seven-year senior notes (Caa1/B/).

Looking ahead, the deal pipeline may include some Canadian bank offerings of deposit notes, one informed bond source said.

"Bank earnings start coming out this Thursday," the source said. "Canadian pricing is looking cheaper for them."

The last deposit note offering in Canada was in October. Canadian Imperial Bank of Commerce (Aa2/A+/DBRS: AA) sold C$1.25 billion of 2.35% five-year deposit notes on Oct. 15.

Earlier in the month, on Oct. 2, Bank of Montreal (Aa2/A+/DBRS: AA) priced C$1.5 billion of 1.89% three-year deposit notes.

Corporate bonds ended slightly weaker on the day.

The Markit CDX Series 18 North American investment-grade index eased 1 bp to a spread of 102 basis points.

The Markit CDX Series 18 North American high-yield index fell to 99.33 from 99.42.

Canadian government bonds continued a second day of gains. The 10-year note yield dropped 3 bps to 1.73%. Canada's 30-year bond yield fell to 2.31% from 2.34%.

Deal flow continues

Export Development Canada priced $1 billion of 0.75% five-year notes on Tuesday at a spread of Treasuries plus 10 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes (Aaa/AAA/) priced at 99.961 to yield 0.758%. There is no call option.

BNP Paribas Securities Corp., Morgan Stanley & Co. International plc, RBC Capital Markets LLC and TD Securities (USA) LLC were the bookrunners.

Proceeds will be used for general corporate purposes.

The issuer was last in the U.S. bond market with a $1 billion sale of three-year notes on June 12.

The government-backed agency for exporters is based in Ottawa.

Financement-Quebec prices

Starting the day's pricing action in Canada, Financement-Quebec (Aa2/A+//DBRS: A) sold C$500 million in a reopening of its 2.45% seven-year medium-term notes at 99.751 to yield 2.489% on Tuesday, according to an informed source.

The series C10 notes due Dec. 1, 2019 priced at a spread of 98 bps over the Canadian government benchmark.

National Bank Financial Inc. was the lead manager.

Financement-Quebec originally priced the issue on July 10 in a C$500 million offering at 99.911 to yield 2.463%, or a spread of 105 bps over the Canadian government benchmark. The issue was reopened on Oct. 4 to sell C$500 million of the notes at 100.083 to yield 2.437%, or 97 bps over the Government of Canada benchmark. The total outstanding is C$1.5 billion.

Financement-Quebec is a Quebec provincial agency that provides financial services to public institutions.

Enbridge brings C$150 million

Enbridge Pipelines priced C$150 million of the 2.93% 10-year medium-term notes (/A-/DBRS: A) at 99.983 to yield 2.932% on Tuesday, according to an informed bond source.

The notes due Nov. 30, 2022 priced at a spread of 113 bps over the interpolated Government of Canada bond curve.

TD Securities Inc. was the bookrunner.

Proceeds will be used to repay short-term debt and for general corporate purposes.

Enbridge Pipelines was last in the Canadian debt markets over the summer with a 100-year bond offering. The company on July 17 sold C$100 million of 4.1% medium-term notes due July 18, 2112 (DBRS: A) at par to yield 185 bps over the Government of Canada benchmark.

The company is a unit of Enbridge Inc., a Calgary, Alta.-based oil and gas distributor and transportation company.

First Capital Realty upsizes

First Capital Realty priced an upsized C$150 million of 3.95% 10-year senior debentures at 99.264 to yield 4.04% on Tuesday, according to the company and bond sources.

The series P debentures due Dec. 5, 2022 (Baa2/DBRS: BBB) came at a spread of 224.87 bps over the interpolated Government of Canada bond curve. The deal was upsized by C$50 million.

RBC Capital Markets and TD Securities were the lead managers.

The Toronto-based shopping center owner and developer will use the proceeds for development and redevelopment activities, acquisitions, repayment of debt and general corporate purposes.

First Capital Realty last tapped the Canadian debt markets on July 10 with a C$50 million reopening of its 4.43% series O senior debentures due Jan. 31, 2022, which priced at 100.892 to yield 4.315%, or a spread of 265 bps over the Government of Canada benchmark.

Manulife sells preferreds

Manulife Financial said the company sold C$200 million of non-cumulative rate reset class 1 series 11 preferred shares to yield a 4% dividend for the initial period ending March 19, 2018.

The company sold 8 million shares of the preferred stock (/BBB/DBRS: Pfd-2) at C$25.00 per share.

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

After the initial period, the dividend rate will reset every five years at a rate equal to the five-year Government of Canada bond yield plus 261 bps.

The Toronto-based financial services company plans to use the proceeds for general corporate purposes, including refinancing of maturing debt and investment in subsidiaries.

Tuscany talk in low 10% area

Tuscany International Drilling talked its $200 million offering of senior notes due 2019 (/B/B+) with a yield in the low 10% area, market sources said on Tuesday.

The roadshow was scheduled to wrap up on Tuesday.

Credit Suisse and Scotia Capital are the joint bookrunners.

The Rule 144A and Regulation S notes come with four years of call protection.

The Calgary, Alta.-based oilfield services provider plans to use the proceeds, together with funds drawn from an amended and upsized revolver, to repay term loans under its credit agreement.

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.