Canadian markets thin on August breaks; primary calendar stays bare; Golf Town notes flat

By Cristal Cody

Prospect News, Aug. 17 - The Canadian bond markets saw light activity on Friday with many market participants out for vacations, bond sources said.

"It's not a very busy time of year, and I don't really see a lot in the pipeline that would make next week any different than this week," a syndicate source said.

Across the border, Global Hunter has been in the market with Petaquilla Minerals Ltd.'s U.S. dollar-denominated $210 million offering of five-year senior secured notes.

Vancouver, B.C.-based Petaquilla has been around to visit a few accounts and is presently waiting for quarterly numbers, which are due in two weeks, according to an informed source, who added that the deal is now likely September business.

The Canadian markets saw a few deals over the week, including National Bank of Canada's upsized C$750 million offering of 2.689% five-year deposit notes (Aa2/A/DBRS: AA) on Thursday and Hydro One Inc.'s C$235 million add-on to its 3.79% 50-year medium-term notes (A1/A+/DBRS: A) on Monday.

A provincial deal had been expected to price late in the week following the C$4.65 billion sale of Canada Mortgage Bonds from Canada Housing Trust (Aaa/AAA/DBRS: AAA) on Wednesday, but issuance has stayed quiet.

"Nothing," a provincial bond source said on Friday.

Quiet trading

Corporate bonds traded flat over most of the week but firmed slightly on Thursday and Friday.

"It's been very quiet," a source said. "Credit is tighter today - well basically flat right now - that's better than wider."

The Markit CDX Series 18 North American investment-grade index ended the day 1 basis point better at a spread of 100 bps.

The Markit CDX Series 18 North American high-yield index rose to 98.34 from 98.12.

In the secondary market, the 10½% senior second-lien notes due 2018 that Golf Town Canada Inc. and Golfsmith International Holdings, Inc. sold in July are trading unchanged, a bond source said.

Canadian government bonds closed better with yields on the short end down 4 bps. The two-year note yield fell 4 bps to 1.20%. The 10-year note yield closed down 1 bp to 1.95%.

In Canadian economic data, Statistics Canada said on Friday that consumer prices rose 1.3% in July, following a 1.5% rise in June.

Golf Town, Golfsmith flat

The 10½% senior notes due 2018 that Golf Town Canada and Golfsmith International sold in July traded flat at 100.5 in the secondary market, a bond source said on Friday.

Golf Town Canada and Golfsmith International sold $125 million of the notes (/B/DBRS B low) at par on July 13.

Markham, Ont.-based Golf Town, which acquired Golfsmith, is a specialty golf retailer.

Paul A. Harris contributed to this review

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