Golden Credit Card sells C$1.2 billion; Bell Aliant, Enersource surprise market with deals

By Cristal Cody

Prospect News, April 20 - In the last full day of trading ahead of the early holiday bond close on Thursday and full close on Friday, three corporate bond deals surprised the Canadian bond markets on Wednesday, informed sources said.

In the largest deal of the day, Golden Credit Card Trust upsized C$1.2 billion from C$500 million its offering of credit card receivables-backed senior notes, a day after Master Credit Card Trust sold C$800 million in a similar deal.

Also keeping the day active, Enersource Corp. sold C$320 million in two tranches of 10-year and 30-year senior debentures, and Bell Aliant Regional Communications LP brought C$300 million in medium term notes.

"It's been a very successful day for new issuance in Canada," one informed bond source said. "Tone has been very good and all the new supply has been well digested."

All three issues from Golden Credit Card Trust, Bell Aliant and Enersource traded 2 basis points to 3 bps tighter, a source said.

Meanwhile Canadian government bonds fell, tracking U.S. Treasuries on Wednesday. The 10-year bond yield rose to 3.33% from 3.27%. The 30-year bond yield rose 5 bps to 3.76%.

U.S. Treasuries dropped on Wednesday as stocks rallied late in the day. The 10-year note yield rose 3 bps to end at 3.4%. The 30-year bond yield also climbed 3 bps to 4.46%.

Golden sells C$1.2 billion

Golden Credit Card Trust priced C$1.2 billion, upsized from C$500 million, in credit card receivables-backed senior notes (Aaa/DBRS: AAA) on Wednesday, an informed source said.

The 3.51% notes due May 15, 2016 priced at 81.3 bps over the Government of Canada benchmark.

RBC Capital Markets Corp. was the lead manager.

Golden Credit Card's notes traded late Wednesday in the secondary market about 2 bps tighter, a source said.

The trust consists of Visa credit card receivables in accounts originated by the Royal Bank of Canada.

Enersource sells 10-, 30-years

Enersource (A/DBRS: A) sold C$320 million in two tranches of 10- and 30-year senior debentures on Wednesday, an informed source connected to the sale said.

In the first tranche, the company priced C$110 million in 4.521% notes due April 29, 2021 at par, or a spread of 109.4 basis points over the Government of Canada benchmark, compared to guidance of 112 bps over. The notes have a Canada call at 27.5 bps over the government benchmark.

The company also sold C$210 million in 5.297% notes due April 29, 2041 at par, or a spread of 152.1 bps over the Government of Canada benchmark, compared to price talk of 155 bps over. The bonds have a Canada call at 38 bps over.

CIBC World Markets Inc. was the lead manager.

Proceeds will be used to repay C$290 million in the Borealis Infrastructure Trust 6.27% bonds due May 3, 2011 and for general corporate purposes.

Both tranches from Enersource were well oversubscribed and traded in the secondary market, a source said.

"Two basis points tighter on both," the source said.

The electric utility is 90% owned by the City of Mississauga in Ontario and 10% by BPC Energy Corp., which is part of the Ontario Municipal Employees Retirement System.

Bell Aliant sells C$300 million

Bell Aliant Regional Communications (BBB/DBRS: BBB) priced C$300 million in 4.88% medium term notes due April 26, 2018 at 99.994 to yield 4.881% on Wednesday, according to the company and informed sources.

The notes priced at a spread of 183.5 basis points over the Government of Canada benchmark. The deal has a Canada call at 46.25 bps and a change of control put at 101%.

"Very good demand out of the institutional Canadian investor base," a source said.

CIBC World Markets Inc., National Bank Financial Inc. and RBC Capital Markets Corp. were lead managers.

Proceeds will be used to make a partial redemption of the company's 4.72% medium term notes due Sept. 26, 2011 and for general corporate purposes.

Bell Aliant's notes were seen trading at 180 bps, the source said.

Bell Aliant Regional is a unit of Bell Aliant Inc., one of North America's largest regional communications providers. It serves customers in six Canadian provinces.

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