Ontario sells C$600 million long bond add-on; Golden Credit Card details $1.2 billion deal

By Cristal Cody

Prospect News, Sept. 27 - The Province of Ontario tapped the Canadian markets on Thursday in a C$600 million reopening of its 3.5% bonds due 2043, while details of Golden Credit Card Trust's U.S. dollar-denominated $1.2 billion offering emerged.

The province's bonds came at a spread of 97 basis points over the Government of Canada benchmark and held at 97 bps in secondary trading, a bond source said.

Golden Credit Card Trust had been expected to also sell two Canadian dollar tranches of subordinated notes (Baa1//DBRS: BBB) but raised $1.2 billion of notes in the two-part U.S. dollar offering, according to an informed source on Thursday.

Bonds traded tighter on Thursday as risk markets improved following Spain's surprise budget cuts.

The Markit CDX Series 18 North American investment-grade index firmed 3 bps to a spread of 99 bps.

The Markit CDX Series 18 North American high-yield index edged up to 99.93 from 99.89.

Coming up in the markets on Friday, First Quantum Minerals Ltd. plans to start a roadshow in London for a $350 million offering of seven-year senior notes, according to an informed source.

Government bonds traded lower over the day with yields up after a reduced flight-to-quality bid.

Canada's 10-year note yield closed flat at 1.75%, while the 30-year bond yield rose 2 bps to 2.35%.

Ontario reopens long bonds

The Province of Ontario (Aa2/AA-/DBRS: AA) priced C$600 million in a reopening of its 3.5% long bonds at 103.62 to yield 3.311% on Thursday, an informed source said.

The bonds due June 2, 2043 came at a spread of 97 bps over the Government of Canada benchmark.

TD Securities Inc. was the lead manager.

The province last reopened the issue on Aug. 8 in a C$600 million add-on that priced at 102.399 to yield 3.374%, or a spread of 101.5 bps over the Government of Canada benchmark.

The bonds originally priced on Jan. 26, 2012 in a C$600 million offering at 99.187 to yield 3.543%, or 88 bps over the Government of Canada benchmark.

The total outstanding is C$5.85 billion.

Golden Credit Card terms

Golden Credit Card Trust sold $1.2 billion of notes in a two-part U.S. dollar Regulation S and Rule 144A private placement offering, according to an informed source on Thursday.

The trust priced $700 million of 0.79% series 2012-5A credit card receivables-backed senior notes due September 2017 (Aaa/AAA/DBRS: AAA) at 99.989 to yield 0.795%, or a spread of 33 bps over Treasuries.

In the second part of the deal, the trust sold $500 million of series 2012-6A senior floating-rate notes due September 2019 (Aaa//DBRS: AAA) at par to yield one-month Libor plus 48 bps.

The trust also was expected to sell two Canadian dollar tranches of subordinated notes (Baa1//DBRS: BBB).

RBC Capital Markets LLC was the bookrunner. J.P. Morgan Securities LLC was senior co-manager, and Bank of America Merrill Lynch and Citigroup Global Markets Inc. were the co-managers.

Proceeds will be used to finance undivided co-ownership interests in the receivables of certain credit card accounts.

Golden Credit Card Trust is a revolving pool of MasterCard and Visa credit card receivables generated by accounts at Toronto-based Royal Bank of Canada.

First Quantum sets roadshow

First Quantum Minerals plans to start a roadshow on Friday in London for a $350 million offering of seven-year senior notes, according to an informed source.

Citigroup and Jefferies & Co. are the joint global coordinators.

Citigroup will lead the roadshow in London, which is set for Friday and for Oct. 4.

Jefferies will lead roadshows on the east and west coasts of the United States, which are set for Monday through Wednesday.

BNP Paribas is the joint bookrunner.

The Rule 144A and Regulation S for life notes become callable in three years at par plus 75% of the coupon.

Proceeds will be used for general corporate purposes.

First Quantum Minerals is a Vancouver, B.C.-based international mining and metals company engaging primarily in exploration, mine development and the production of copper, nickel and gold mines.

Paul A. Harris contributed to this review

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.