FortisAlberta, Nova Scotia bring deals; Paramount Resources, Yellow Media trade higher

By Cristal Cody

Prospect News, Oct. 14 - Two issuers tapped the Canadian bond markets on Friday, informed sources said.

FortisAlberta Inc. sold C$125 million in 4.54% 30-year bonds, while the Province of Nova Scotia sold C$250 million in a reopening of its 10-year notes.

"Been busy," one bond source said.

High-yield bonds closed better on the week on strong trading, a trader said Friday.

"The market's up at least a point after being up half a point yesterday," the trader said. "Things are definitely better to buy."

Debt from Paramount Resources Ltd. and Yellow Media Inc. traded stronger on Friday.

Government bonds dropped on Friday, sending yields higher. Canada's 10-year note yield rose to 2.4% from 2.31%. The 30-year bond yield closed up 7 basis points to 2.97%.

Statistics Canada said Friday that Canadian manufacturing sales jumped for a second month in August. Sales rose 1.4% on a seasonally adjusted basis to C$47.6 billion, the highest level since October 2008.

FortisAlberta sells C$125 million

Canadian electric utility FortisAlberta (DBRS: A) sold C$125 million 4.54% 30-year bonds at 99.984 to yield 4.541% on Friday, a source told Prospect News.

The bonds due Oct. 18, 2041 priced at a spread of 158 bps over the Canadian government benchmark, at the tight end of talk, which was 160 bps, plus or minus 2 bps.

CIBC World Markets Inc. was the lead manager.

The Calgary, Alta.-based utility is a subsidiary of Fortis Inc., Canada's largest investor-owned gas and electric utility.

Nova Scotia reopens 10-years

The Province of Nova Scotia (Aa2/A+/DBRS: A) sold C$250 million in a reopening of the 4.1% notes due June 1, 2021 at 106.296 to yield 3.329% on Friday, a bond source said.

The notes priced at a spread of 95 bps over the Government of Canada benchmark.

RBC Capital Markets Corp. was the lead manager.

The province originally priced the issue in a C$400 million offering on March 2 at 99.765 to yield 4.129%, or a spread of 72 bps over the Government of Canada benchmark.

Paramount bonds rise

Paramount Resources' 8¼% series 2 senior unsecured notes due Dec. 13, 2017 (Caa2/B+/) traded up 2 to 3 points on Friday to 100.5 bid, a trader said.

The company sold C$300 million of the notes at par on Nov. 30, 2010.

Calgary, Alta.-based Paramount Resources is an oil and natural gas exploration, development and production company.

Yellow Media bonds creep up

Yellow Media's bonds "have been creeping up" since the plunge bonds took after the company announced that it would take a C$2.9 billion charge in the third quarter and was downgraded to BB by DBRS.

The company's 7¾% notes due 2020 were seen going out at 43 bid, 44 offered, a trader said Friday.

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