Quebec, Scotiabank, National Bank of Canada price; Spy Hill Power eyes roadshow for bonds

By Cristal Cody

Prospect News, Jan. 8 - The Province of Quebec kicked off Tuesday's deal action early with a C$500 million note offering that was followed in the afternoon by three more issuers.

The Bank of Nova Scotia priced C$1.25 billion of five-year senior deposit notes, and National Bank of Canada sold C$750 million of three-year deposit notes.

Scotiabank's offering was oversubscribed, a source said.

"I saw it open a point or two inside," the source said. "It was sized to trade well."

First National Financial GP Corp. brought a C$325.2 million offering of mortgage-backed securities.

Looking ahead to Friday, Spy Hill Power LP will start a roadshow for C$152 million of senior secured amortizing bonds, according to sources.

Bonds ended slightly weaker on the day. The Markit CDX Series 19 North American investment-grade index eased 1 basis point to a spread of 86 bps.

The Markit CDX Series 19 North American high-yield index dropped to 102.38 from 102.51.

Government bonds traded higher. Canada's 10-year note yield fell 3 bps to 1.91%. The 30-year bond yield closed 2 bps lower at 2.48%.

Quebec reopens 3% notes

The Province of Quebec (Aa2/A+/DBRS: A) priced a C$500 million offering of its existing 3% medium-term notes due Sept. 1, 2023 on Tuesday at 99.394 to yield 3.067%, according to an informed source.

The notes priced at a spread of 103.5 bps over the Government of Canada benchmark.

National Bank Financial Inc. was the bookrunner.

The province last reopened the issue on Dec. 18 when it sold C$500 million of the notes at 99.39 to yield 3.067%, or a spread of 111.5 bps over the Government of Canada benchmark.

The total outstanding is C$2 billion.

Bank of Nova Scotia prices

Later in the day, the Bank of Nova Scotia (Aa1/A+/DBRS: AA) priced C$1.25 billion of 2.37% five-year senior deposit notes at 99.962 to yield 2.378%, according to an informed source.

The notes due Jan. 11, 2018 priced at a spread of 90 bps over the Government of Canada bond curve.

Scotia Capital Inc. was the bookrunner.

Toronto-based Bank of Nova Scotia is a global financial services provider.

National Bank of Canada prices

National Bank of Canada (Aa2/A-/DBRS: AA) was in the market with a C$750 million offering of 2.05% deposit notes due Jan. 11, 2016 that priced at par on Tuesday, according to an informed bond source.

The notes came at a spread of 76.5 bps over the Government of Canada benchmark, or 75 bps over the Government of Canada bond curve.

National Bank Financial was the lead manager.

National Bank of Canada last brought a deposit note offering in the Canadian debt markets on Aug. 16 with a C$750 million sale of 2.689% notes due Aug. 21, 2017, which priced at par to yield a spread of 115 bps over the government benchmark.

The financial services company is based in Montreal.

First National active

First National Financial tapped the Canadian market on Tuesday for C$325.2 million of 2% mortgage-backed securities, according to a bond source.

The notes due Jan. 15, 2017 priced at 99.539 to yield 2.102%, or a spread of 67 bps over the Government of Canada bond curve.

TD Securities Inc. and RBC Capital Markets were the lead managers.

The company is a unit of Toronto-based mortgage provider First National Financial Corp.

Spy Hill to start roadshow

Spy Hill Power plans to hold a roadshow in Canada on Friday for a C$152 million offering of senior secured amortizing bonds (DBRS: A), according to informed sources on Tuesday.

The series A bonds are due March 31, 2036.

CIBC World Markets and Casgrain & Co. Ltd. are the lead managers.

Proceeds will be used to repay C$110 million in bank debt, cover C$32.9 million of interest rate swap breakage and make a C$5.6 million distribution to Northland Power Inc.

Spy Hill Power is indirectly owned by Northland Power and secured by all assets of ProjectCo., a special-purpose entity created to own, build and operate an 86 megawatt peaking facility about 200 kilometers east of Regina, Sask., under a 25-year peaking power purchase agreement with electric utility SaskPower.

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