Westcoast Energy prices two-tranche deal; corporate bonds end wider, Yellow Media edges up

By Cristal Cody

Prospect News, Oct. 25 - In the Canadian bond markets on Tuesday, Westcoast Energy Inc. sold an upsized C$300 million of medium-term notes in two tranches.

The deal was increased to C$300 million, the "maximum the issuer would accept," a source said, from a planned C$250 million.

Provincial primary activity stayed quiet on Tuesday after a deal was brought on Monday by the Province of British Columbia and on Friday from the Province of Quebec, a source said.

Market tone was weak on Tuesday and corporate bonds moved wider on the day. The Markit CDX Series 17 North American high-grade index eased 4 basis points to a spread of 130 bps on Tuesday.

Yellow Media Inc.'s high-yield notes edged higher in secondary trading, a source said.

Canadian government bonds rallied after the Bank of Canada left overnight rates unchanged at 1%, stating that the economy has weakened since July.

The Bank of Canada's statement "was really a bit more dovish than the market had expected," a bond strategist said. "We saw a pretty good bid in to fixed income in Canada. Canadian yields have started falling off pretty sizable in the front end of the curve."

Canada's 10-year note yield dropped 10 bps to 2.26%. The yield on the long end also fell, sending the 30-year bond yield down to 2.92% from 2.99%.

Investors continue to focus on Europe on reports Tuesday that a key gathering of European finance ministers had been cancelled ahead of a summit meeting on Wednesday to discuss a resolution to the region's debt problems.

Westcoast Energy prices

In Canada's bond market early on Tuesday, Westcoast Energy (/BBB+/DBRS: A) priced C$300 million of medium-term notes in two tranches, according to an informed source.

The company sold C$150 million of 3.883% 10-year notes at par. The bonds priced at a spread of 152 bps over the Canadian bond curve.

In the second tranche, Westcoast Energy sold C$150 million of 4.791% 30-year bonds at par, or a spread of 182 bps over the Government of Canada benchmark.

Scotia Capital Inc. and CIBC World Markets Inc. were the lead managers.

Westcoast Energy last was in the bond market on Nov. 29, 2010 with a C$250 million sale of 3.28% medium-term notes due Jan. 15, 2016 that priced at 99.913 to yield 3.298%.

Calgary, Alta.-based Westcoast Energy, a subsidiary of Houston-based natural gas infrastructure company Spectra Energy Corp., processes natural gas throughout Western Canada.

Yellow Media higher

Yellow Media's bonds are edging back up in trading, a source said.

The company's 6½% notes due 2013 (DBRS: BB) traded higher at 64.25 on Tuesday. The notes were quoted on Sept. 29 at 61 bid, 66 offered.

Yellow Media's debt plunged in trading after the company announced on Sept. 28 that it would take a C$2.9 billion third-quarter charge and eliminate a dividend after the Oct. 17 payment.

The phone directory publisher is based in Montreal.

© 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.