Brookfield, Scotiabank bring Friday deal action; IBRD reopens notes; Garda World flat

By Cristal Cody

Prospect News, Sept. 7 - The Canadian bond markets continued to see pricing action on Friday with deals from Brookfield Asset Management Inc. and the Bank of Nova Scotia, according to informed sources.

Brookfield Asset Management sold C$425 million of 4.54% medium-term notes due March 31, 2023 after the company announced earlier in the day it was considering a deal.

"It was well oversubscribed," a syndicate source said. "Part of the appeal was they were also using the proceeds to buy back existing bonds and that had investors feeling pretty good about it."

The notes traded more than 10 basis points better in secondary trading, the source said.

Other primary activity on Friday included Bank of Nova Scotia's C$732.7 million offering of floating-rate notes due Sept. 5, 2013.

International Bank for Reconstruction and Development on Friday detailed its C$250 million reopening of its 1.7% notes due April 30, 2015.

In the secondary market, Garda World Security Corp.'s 9¾% senior notes due March 15, 2017 (B2/B/) traded flat following the company's announcement of a CEO-led buyout, a trader said.

"They're not really down on the day, pretty much unchanged," the trader said.

The Markit CDX Series 18 North American investment-grade index firmed 2 bps to a spread of 93 bps on Friday.

The Markit CDX Series 18 North American high-yield index rose to 100.07 from 99.52.

Canadian government bonds closed with yields higher across the curve following stronger job numbers. The 10-year note yield rose 1 bp to 1.85%. Canada's 30-year bond yield ended 2 bps higher at 2.43%.

Canadian employment rose by 34,000 in August, Statistics Canada said. The unemployment rate stayed unchanged at 7.3%.

Scotiabank sells floaters

Bank of Nova Scotia (Aa1/AA-/DBRS: AA) brought C$732.7 million in an offering of floating-rate notes due Sept. 5, 2013 at one-month CDOR plus 20 bps on Friday, a bond source said.

Scotia Capital Inc. was the lead manager.

Toronto-based Bank of Nova Scotia is a global financial services provider.

Brookfield Asset prices

In early pricing action, Brookfield Asset Management raised C$425 million in an offering of 4.54% medium-term notes due March 31, 2023 at 99.948 to yield 4.546%, a bond source said.

Brookfield Asset Management priced the notes (Baa2/A-/DBRS: A) at a spread of 273.3 bps over the Canadian bond curve.

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

The firm plans to use the proceeds to redeem or repurchase C$350 million of its 8.95% notes that mature on June 2, 2014 and for general corporate purposes.

In the secondary market going out on Friday, the notes sere seen tighter at 262 bps bid "at one point," a bond source said.

Toronto-based Brookfield Asset Management is a global alternative asset manager with more than $150 billion of property, power and infrastructure assets under management.

IBRD raises C$250 million

In other primary activity, International Bank for Reconstruction and Development detailed a C$250 million add-on to its 1.7% notes due April 30, 2015, which priced at 100.7 to yield 1.426%, a source with the bank said on Friday.

The notes (Aaa/AAA/) priced at a spread of 23 bps over the Government of Canada benchmark.

RBC Capital Markets Corp. was the bookrunner.

IBRD first sold the notes in a C$400 million offering on April 20 at 99.959 to yield 1.714%, or a spread of 25 bps over the government benchmark. The total outstanding is C$650 million.

The Washington, D.C.-based World Bank arm provides loans to developing countries.

Garda World flat on buyout

Garda World Security's 9¾% senior notes due March 15, 2017 (B2/B/) traded flat at 104 bid, 105 offered on Friday following the buyout news, a Canadian trader said.

The notes were seen closing August at 106 bid.

The company originally sold the C$75 million issue on March 8, 2010 at 98.148 and last tapped the notes on Jan. 27, 2012 with a C$50 million reopening that priced at 102. The total outstanding is C$175 million.

Garda World Security said that it plans to be acquired by a consortium that includes the company's founder, chairman and chief executive officer, Stephan Cretier, and a subsidiary of funds for C$1.1 billion in cash and assumed debt.

The deal must receive regulatory and shareholder approval and is expected to close later in the year.

The security services, cash logistics and global risk consulting provider is based in Montreal.

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