Ontario sells C$1 billion in reopening; Bombardier firms; Brookfield prices preferreds

By Cristal Cody

Prospect News, Oct. 21 - A few issuers stayed active in the Canadian bond market on Thursday.

"Market noise is spotty," a source said Thursday. "We have banks' year-end coming up at the end of the month. You're not going to see a lot of the dealers being too aggressive with making markets out there right now."

The Province of Ontario sold C$1 billion in a reopening of its existing 4.2% 10-year notes on Thursday, a source told Prospect News.

The notes due June 2020 priced at 105.864, or a spread of 71 basis points over Canada's benchmark bond, to yield 3.476%.

Royal Bank of Canada was the lead bookrunner.

In the United States, the Bank of Nova Scotia priced $2.5 billion of 1.65% five-year covered bonds by early afternoon Thursday to yield Treasuries plus 57.25 bps, a source close to the sale said.

The bonds (Aaa/AAA) priced at 99.828 to yield 1.686%. They are non-callable.

Bank of America Merrill Lynch, Barclays Capital Inc., Morgan Stanley & Co. Inc. and Scotia Capital (USA) Inc. were the bookrunners.

The bank did a previous $2.5 billion sale of three-year covered bonds on July 15.

The financial services company is based in Toronto.

Canada's Bombardier prices

Also in the market on Thursday, Bombardier Inc. priced a €780 million issue of 6 1/8% 10.5-year senior notes (Ba2/BB+) at 99.0422 to yield 6¼% on Thursday, according to an informed source.

The yield printed at the tight end of the 6¼% to 6½% price talk.

Deutsche Bank Securities, BNP Paribas, Credit Agricole CIB, J.P. Morgan Securities LLC and UBS Investment Bank were the joint bookrunners for the quick-to-market deal.

The Montreal-based aerospace company will use the proceeds to fund the tender offers for its Euribor plus 312.5 bps notes due 2013 and its 8% notes due 2014, and for general corporate purposes.

In the secondary market, Bombardier's 7% notes due 2020 were seen up a point, a source said.

Brookfield Asset sells preferreds

Elsewhere, Brookfield subsidiaries struck while the market was hot. On Thursday, Brookfield Asset Management Inc. said that it priced C$200 million in preferred stock.

The Canadian company offered 8 million shares of the series 26 preferred securities at C$25.00 each.

CIBC, RBC Capital Markets Corp., Scotia Capital Inc. and TD Securities Inc. were the lead bookrunners. The underwriters have been granted an option to purchase an additional 2 million preferred shares at the same offering price.

The shares were not offered for sale in the United States. The offering is expected to close on or about Oct. 29.

The proceeds will be used for general corporate purposes.

The deal came a day after Brookfield Asset Management sold C$350 million in 5.3% senior unsecured notes due March 1, 2021.

The notes (Baa2/A-/BBB/) were sold at 250 bps over the Canadian benchmark to yield 5.307%.

The proceeds will be used to refinance existing debt and for general corporate purposes.

Toronto-based Brookfield Asset Management has more than $100 million of property, power and infrastructure assets under management.

Brookfield Properties sells preferreds

Brookfield Properties Corp. said it priced C$300 million in an offering of its series P preferred shares on Thursday.

Brookfield Properties sold 12 million preferred shares at C$25.00 each to yield 5.15% for the initial six-year period ending March 31, 2017.

The shares were not offered for sale in the United States.

RBC Capital Markets Corp., CIBC, Scotia Capital Inc. and TD Securities Inc. were the lead bookrunners.

Proceeds will be used for general corporate purposes, including the possible redemption or repayment of corporate or other obligations.

The shares started trading on Thursday on the Toronto Stock Exchange under the ticker symbol BPO.PR.P. The preferred stock traded as low as C$24.90 and as high as C$25.04 over the day, ending at C$25.00.

Toronto-based Brookfield Office Properties owns, develops and manages office properties in the United States, Canada and Australia.

Andrea Heisinger, Paul A. Harris and Paul Deckelman contributed to this review

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