Canadian primary takes break; market tone weakens, Agrium's new debentures widen 7 bps

By Cristal Cody

Prospect News, Sept. 26 - Market tone weakened on Wednesday as stocks fell and Canadian primary activity cooled with no bond deals over the day, informed sources said.

"Nothing, nada, zilch," one syndicate source said. "Today, it was just silent."

On Tuesday, AltaGas Ltd. priced C$350 million of senior medium-term notes due Sept. 28, 2021, while the provinces of British Columbia and Quebec brought more than C$1 billion of bonds.

Another source in Canada also noted the day's light action.

"It's pretty quiet today," the source said.

Golden Credit Card Trust, a pool of MasterCard and Visa credit card receivables managed by Toronto-based Royal Bank of Canada, sold a U.S. dollar-denominated offering of notes, but pricing details were not immediately available.

The deal pipeline for early October is expected to fill out.

There are "rumblings" about a couple of offerings for the first week of the month, one source said.

"A couple of new issuers could hit the market next week," the source said.

No secondary activity was seen in Canadian Imperial Bank of Commerce's new three-year senior notes, while the new debentures from Agrium Inc. widened 7 basis points over the day along with other debt, a trader said.

"Everything was weaker today," the trader said.

Canadian bank paper from issuers including Bank of Nova Scotia and Toronto-Dominion Bank was mostly flat, a market source said.

The Markit CDX Series 18 North American investment-grade index ended unchanged after easing 4 bps the previous day to a spread of 102 bps.

"Traders didn't see up until 2 o'clock a whole lot of flow," a Canadian bond source said. "The day before, there was some selling."

The Markit CDX Series 18 North American high-yield index fell to 99.89 from 100.12.

Canadian government bonds traded higher on global economic concerns.

The yield on Canada's 10-year note closed 7 bps lower at 1.75%. The 30-year bond yield dropped 5 bps to 2.33%.

Agrium widens

Agrium's 3.15% debentures due Oct. 1, 2022 widened to 152 bps bid, 147 bps offered in secondary trading going out on Wednesday, a trader said.

The company sold a U.S. dollar-denominated $500 million of the debentures (Baa2/BBB/BBB+/DBRS: BBB) on Monday at a spread of Treasuries plus 145 bps.

The retailer of agricultural products is based in Calgary, Alta.

Scotiabank notes flat

Bank of Nova Scotia's 2.55% notes due 2017 ended unchanged at 55 bps bid on Wednesday, a market source said.

Scotiabank sold $1.25 billion of the notes (Aa1/AA-/) on Jan. 5, 2012 at Treasuries plus 172 bps.

The bank is based Halifax, N.S.

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