Ontario, Horizon price; Enbridge sells 100-year notes; Canadian Gaming talks deal; MEG up

By Cristal Cody

Prospect News, July 17 - The Province of Ontario tapped the provincial markets in a C$750 million reopening of its 3.15% 10-year notes on Tuesday after a dry spell in the primary market.

"The deal went well," a bond source said. "Given what spreads have been doing for the last few days, this was a good day to go. For the rest of the week, we don't think there's a whole lot expected in terms of issuance."

In the investment-grade bond market, Horizon Holdings Inc. came late in the day with an offering of C$150 million of 10-year senior debentures in a private placement in Canada.

Enbridge Pipelines Inc. surprised the market late on Tuesday with a 100-year offering, a bond source said.

The company is a unit of Enbridge Inc., which said on Tuesday that it closed its upsized offering of C$450 million of cumulative redeemable preference shares (Baa3/BBB/DBRS: Pfd-2) sold on July 9.

Looking ahead to Wednesday, the Canadian high-yield market expects activity from Great Canadian Gaming Corp. The company on Tuesday talked its C$400 million of 10-year senior notes to yield 6¾%, plus or minus 12.5 basis points.

In secondary trading, Canadian issuer MEG Energy Corp.'s 10.5-year senior notes sold in a U.S. dollar-denominated $800 million offering the previous day traded up 3/8 of a point on the day, a trader said.

"Everything's been better for the most part," the trader said.

The Markit CDX Series 18 North American investment-grade index firmed 2 bps to a spread of 111 bps.

The Markit CDX Series 18 North American high-yield index rose to 96.49 from 96.18.

The Bank of Canada left the overnight 1.00% rate unchanged in its monetary policy announcement on Tuesday.

Canadian government bonds ended lower across the curve. The 10-year note yield rose 2 bps to 1.64%. The 30-year bond yield climbed 3 bps to 2.27%.

Ontario prices C$750 million

The Province of Ontario (Aa2/AA-/DBRS: AA) priced C$750 million in a reopening of its 3.15% 10-year notes at 104.412 to yield 2.639% on Tuesday, a bond source said.

The notes due June 2, 2022 priced at a spread of 100 bps over the Government of Canada benchmark.

Scotia Capital Inc. was the lead manager.

The province initially sold the issue on Nov. 3, 2011 in a C$750 million offering at 99.589 to yield 3.196%, or a spread of 87 bps over the government benchmark.

The province last reopened the notes on June 7 in a C$750 million offering priced at 102.737 to yield 2.833%, or a spread of 103.5 bps over the Government of Canada benchmark.

Horizon sells C$150 million

Horizon Holdings (/A/) sold C$150 million of 3.033% senior debentures at par in a private placement in Canada on Tuesday, an informed bond source said.

The series B debentures due July 25, 2022 priced at a spread of 137 bps over the Government of Canada benchmark.

CIBC World Markets Inc. was the bookrunner. Co-managers were BMO Capital Markets Corp. and Scotia Capital.

The debentures may be redeemed at the Canada Bond Yield plus 34 bps.

Horizon Holdings is an investment holding company that provides electric utility distribution and energy services and is owned by Hamilton, Ont.-based Hamilton Utilities Corp.

Enbridge sells 100-year notes

Enbridge Pipelines priced C$100 million of 4.1% 100-year medium-term notes at par on Tuesday, a bond source said.

The notes due July 18, 2112 (DBRS: A) priced at a spread of 185 bps over the Government of Canada benchmark.

BMO Capital Markets was the lead manager.

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

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

Great Canadian Gaming eyed

Great Canadian Gaming talked its offering of C$400 million of 10-year senior notes (B1/BB+/) on Tuesday to yield 6¾%, plus or minus 12.5 bps, an informed bond source said.

Books will launch and close early on Wednesday with pricing to follow.

Great Canadian wrapped its roadshow on Tuesday in Toronto. The company started the roadshow last week in Vancouver, B.C., with stops in New York and Boston.

The deal will be offered in Canada via a private placement and in the United States by Rule 144A.

Scotia Capital and HSBC Capital (Canada) Inc. are the bookrunners. BMO Capital Markets, CIBC World Markets and RBC Capital Markets Corp. are joint lead managers. National Bank Financial Inc. is the co-manager.

The issue's guarantors are current and future material restructured subsidiaries and certain other restricted subsidiaries of Great Canadian.

The notes are non-callable for five years. The issue has a 101% change-of-control put, an equity clawback for up to 35% in the first three years at par plus the coupon and a Canada call at the Canadian Bond Yield plus 100 bps.

Proceeds will be used to refinance the company's U.S. dollar-denominated $161.1 million senior secured tranche B term loans due February 2014 and $170 million senior subordinated notes due February 2015 and their related cross-currency interest rate swaps. The company will start a cash tender offer and consent solicitation for the subordinated notes.

If either the tender offer or the sale of the 10-year notes is unsuccessful, the company said it may cancel, postpone or modify its refinancing plans.

The Richmond, B.C.-based gaming, entertainment and hospitality company has operations in Canada and the United States.

MEG Energy rises

In the secondary market, MEG Energy's notes due 2023 traded up 3/8 of a point on the day to 100.875 bid, 101.125 offered, a trader said.

The company sold the 10.5-year senior notes (B1/BB) at par to yield 6 3/8% on Monday.

The Calgary, Alta.-based oil sands development company plans to use the proceeds for general corporate purposes, including funding capital investments.

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