MetLife sells maple bonds, prices U.S. deal; bonds widen, Bank of Nova Scotia notes ease

By Cristal Cody

Prospect News, April 4 - Metropolitan Life Global Funding I sold an upsized C$350 million of three-year maple bonds and also brought a U.S. dollar-denominated deal on Wednesday, informed sources said.

"The market tone itself is a little bit volatile today," a syndicate source involved in the MetLife Canadian deal said. "The Dow is down and the market's subject to these kind of swings. We got a very successful deal in this environment. The lack of supply helps with spreads."

MetLife also raised $250 million of 10-year notes in the U.S. high-grade market late afternoon following the sale in the Canadian investment-grade market.

The week is a short holiday week and Canadian bond markets close early on Thursday and will be closed on Friday.

A bond offering is possible early Thursday though activity is expected to be light, sources said.

"Hopefully, we'll get more supply this week," a source said early Wednesday. "If anything, it will be this afternoon or early tomorrow."

Bond markets opened slightly wider on Wednesday and ended the day weaker.

The Markit CDX Series 18 North American investment-grade index eased 2 basis points to a spread of 93 bps.

In secondary trading, Bank of Nova Scotia's 2.55% notes due 2017 (Aa1/AA-/) widened 7 bps on the day, a source said.

Government bonds rallied on Wednesday on the move out of stocks. Canada's 10-year note yield fell 6 bps to 2.13%. The 30-year bond yield dropped to 2.68% from 2.73%.

MetLife sells C$350 million

In Canadian primary action on Wednesday, Metropolitan Life Global Funding I sold an upsized C$350 million of 2.624% three-year maple notes (Aa3/AA-/) at par, an informed bond source said.

The notes due April 10, 2015 priced at a spread of 123.1 bps over the Government of Canada benchmark, or 125 bps over the Canadian bond curve.

"We were lucky with this MetLife deal. The order book was very strong and credit investors are sticking to their orders, which is a really good sign of the strength of the Canadian market," a syndicate source said. "This transaction was priced in line with their pricing they achieved in the U.S."

The deal was upsized from C$200 million and launched at 125 bps over the Canadian bond curve.

CIBC World Markets Inc., Scotia Capital Inc. and TD Securities Inc. were lead managers. Co-managers were HSBC Capital (Canada) Inc. and Bank of America Merrill Lynch.

Maple bonds are Canadian dollar-denominated bonds issued by foreign companies.

MetLife Global Funding is the funding arm of U.S.-based insurance company Metropolitan Life Insurance Co.

Bank of Nova Scotia widens

In the secondary market, Bank of Nova Scotia's 2.55% notes due 2017 (Aa1/AA-/) widened 7 bps to 100 bps over Treasuries, a source said on Wednesday.

Scotiabank sold $1.25 billion of the notes (Aa1/AA-/) on Jan. 5 at a spread of 172 bps over Treasuries.

The Canadian bank is based in Halifax, N.S.

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