Canada Housing sells C$6.25 billion; Desjardins prices two-tranche deal; Ontario sale closes

By Cristal Cody

Prospect News, Sept. 16 - Canada bonds were down to mostly flat on Thursday on a day light with new economic data, though a trickle of corporate sales continues to take place.

"The Canadian market was in a holding pattern ahead of the U.S. inflation data tomorrow," said Fergal Smith, managing market strategist at Action Economics in Toronto. "There was no Canadian data today that really moved the market. Yields are 1 to 2 basis points higher across the curve in Canada. In contrast with the U.S., the curve maintained a flatter profile."

Canada's yield on the two-year bond rose 2 bps to 1.516%. The yield on the 10-year bond was up 1 bp at 2.977%.

U.S. Treasuries fell, sending the yield on the 30-year bond up as high as 3.956% before closing at 3.93% from 3.87% a day earlier. The yield on the Treasury's 10-year benchmark note rose 4 bps to 2.76%.

In new deals on Thursday, Canada Housing Trust and Caisse Centrale Desjardins both completed sales, while Thomson Reuters Corp. announced a C$750 million issuance.

Desjardins Group already has sold a total of C$4.2 billion in four debt sales this year, according to the company.

Elsewhere in the Canadian bond market, the Province of Ontario announced it has closed on the sale of $1.25 billion in five-year global notes.

Canada Housing sells C$6.25 billion

Canada Housing Trust sold C$6.25 billion in 2.45% five-year Canada mortgage bonds, series 37, (DBRS: AAA) on Thursday, a source said.

The deal priced in line with guidance of 24.5 bps over the government of Canada 3% December 2015 bond, the source said.

RBC Capital Markets Corp., Bank of America Merrill Lynch, BMO Capital Markets Corp. and TD Securities Inc. were the joint bookrunners.

Proceeds will be used to acquire insured residential mortgages.

Canada Housing Trust is a division of the Canada Mortgage and Housing Corp.

Caisse Centrale Desjardins prices

Caisse Centrale Desjardins priced $1 billion senior notes (Aa1/AA-) in two tranches, according to a press release.

The $500 million tranche of 1.7% three-year notes priced at 99.95 to yield 1.717% with a spread of Treasuries plus 87.5 bps.

A $500 million tranche of 2.65% five-year notes priced at 99.856 to yield 2.681% with a spread of 112.5 bps over Treasuries.

Both tranches of the Rule 144A issue are non-callable.

Bookrunners were Morgan Stanley & Co. Inc. and J.P. Morgan Securities.

Proceeds will be used by the group for day-to-day operations.

Desjardins is the first Canadian cooperative institution to issue in the U.S. market.

Desjardins Group already has sold a total of C$4.2 billion in four debt sales this year, according to a press release.

In February, Caisse Centrale Desjardins priced C$400 million of two- and three-year floating interest rate deposit notes in Canada. In March, the group issued €1 billion of two-year floating-rate deposit notes in the European market. In June, Caisse Centrale Desjardins returned to the Canadian market with the sale of C$500 million of five-year fixed rate deposit notes. Also, this year, Capital Desjardins issued C$900 million in 10-year senior notes.

The treasurer for cooperative financial services provider Desjardins Group is based in Levis, Quebec.

Thomson Reuters holds Canada sale

Thomson Reuters announced on Thursday its sale of C$750 million of 4.35% 10-year notes.

The 4.35% notes (DBRS: A) priced at 99.615 for an initial yield of 4.398%, according to a press release.

The offering is expected to close on Sept. 30.

The securities are not being offered or sold in the United States.

Thomson Reuters plans to use the net proceeds from this offering, available cash and/or other resources to repay its €500 million principal amount of 4.625% medium-term notes due in November 2010.

New York-based Thomson Reuters is a leading source of business and professional news information.

Province of Ontario closes sale

The Province of Ontario settled its $1.25 billion five-year global notes (Aa1/AA-/AA).

The deal carries a 1.875% coupon and priced at 99.962 on Sept. 8, according to a press release from the Ontario Financing Agency.

Banc of America Securities LLC, Credit Suisse Securities (Europe) Ltd., HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc. were the bookrunners.

The bonds closed on Wednesday.

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