National Bank of Canada reopens bonds; Lone Pine starts roadshow; Ford Credit Canada gains

By Cristal Cody

Prospect News, Feb. 6 - The Canadian bond markets saw light activity on Monday while primary activity in the U.S. markets heated up with offerings from issuers including one Canadian bank.

National Bank of Canada sold a $600 million add-on to its 2.2% covered bonds due 2016 in the U.S. investment-grade market.

Canadian energy company Lone Pine Resources Canada, Ltd. also plans to price a deal in the U.S. high-yield market. The company started a roadshow on Monday for a $200 million offering of five-year senior notes.

In addition, Toronto-based Banro Corp. announced that it intends to sell notes and warrants in a brokered private placement debt offering to raise up to $125 million.

Canada's high-yield market could see a new domestic offering ahead from NAL Energy Corp., a Calgary, Alta.-based oil and gas producer that may sell C$125 million to C$150 million of five-year bonds, a source said Monday.

"They're trying to get a deal together," the source said. "They might do a convert instead if they don't get the pricing they want."

RBC Capital Markets Corp. is the bookrunner.

Bonds saw thin activity in the secondary markets on Monday, sources said.

Investment-grade bonds traded mostly flat. The Markit CDX Series 17 North American investment-grade index eased 1 basis point to a spread of 95 bps.

National Bank of Canada's reopened bonds traded 2 bps firmer going out.

High-yield bonds traded mostly unchanged on the day in thin trading.

In the secondary market, the new 4 7/8% notes due 2017 that Ford Credit Canada Ltd. sold last seek edged higher.

Government bonds ended the day better on renewed concerns of a Greek debt default. Canada's 10-year note yield fell to 1.97% from 2.001%. The 30-year bond yield dropped 3 bps to 2.6%.

National Bank of Canada sells $600 million

National Bank of Canada reopened its issue of 2.2% covered bonds due in October 2016 on Monday to add $600 million, a source away from the deal said.

The notes (Aaa/AAA) were priced at a spread of Treasuries plus 67 bps.

Total issuance is $2 billion, including $1.4 billion priced at 104.5 bps over Treasuries on Oct. 12, 2011.

The deal was done under Rule 144A and Regulation S.

Full terms were not available at press time.

Bookrunners were National Bank of Canada Financial, RBC Capital Markets LLC and RBS Securities Inc.

In the secondary market, the bonds firmed to 65 bps bid, 60 bps offered, a trader said.

The financial services company is based in Montreal.

Lone Pine starts roadshow

Lone Pine Resources Canada began a roadshow on Monday for a $200 million offering of five-year senior notes, according to a syndicate source.

The deal is expected to price later this week.

Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Scotia Bank are the bookrunners.

The Rule 144A and Regulation S with registration rights notes come with three years of call protection and feature a three-year 35% equity clawback and a 101% poison put.

The Calgary, Alta.-based oil and gas exploration, development and production company plans to use the proceeds to repay debt.

Banro to sell $125 million

Banro announced in a Monday press release that it intends to proceed with a brokered private placement debt offering in order to raise up to $125 million.

This company is offering units comprised of $1,000 of senior notes due 2017 and one warrant to purchase common shares in the company.

Proceeds will be used for the development of the company's Namoya project and general corporate purposes.

The deal is expected to close in late February 2012.

Banro is a gold mining company focused on production from the Twangiza oxide mine and development of four additional major, wholly owned gold projects, each with mining licenses, along the 210 kilometer long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the Democratic Republic of the Congo.

Ford Credit Canada better

Ford Credit Canada's 4 7/8% notes due Feb. 8, 2017 traded at 100.375 bid, 100.625 offered on Monday in Canada's secondary market, a trader said.

The company sold C$500 million of the notes (Ba1/BB+/DBRS: BB) at par on Wednesday.

Ford Credit Canada is the Canadian financing arm of Ford Motor Co.

Andrea Heisinger and Paul A. Harris contributed to this review

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