Bank deal potential grows after earnings; Transpower New Zealand plans roadshow

By Cristal Cody

Prospect News, March 2 - Canadian bond markets stayed quiet during a typical Friday on the back of quarterly earnings reports from Royal Bank of Canada, Toronto-Dominion Bank and National Bank of Canada this week.

Following the reports, some bank deals are possible in March, sources said on Friday.

"We're finishing up bank earnings; we'll see what comes from our banks after those," a syndicate source said.

Electric utility Transpower New Zealand Ltd. (A1/AA-/) plans to hold a roadshow in Canada for the upcoming week with stops in Montreal, Toronto, Winnipeg, Man., and Vancouver, B.C., sources said.

The roadshow is classified as a non-deal roadshow, but a new maple offering from the foreign utility is possible, depending upon interest.

"We are anticipating some supply out of it," a source said.

The market continues to have a "strong tone" and some primary supply is likely in the upcoming week, a syndicate source said.

Bonds traded mostly unchanged on the day, sources said. The Markit CDX Series 17 North American high-grade index eased 1 basis point to a spread of 94 bps on Friday.

National Bank of Canada's 2.2% covered bonds due 2016 traded unchanged, while Toronto-Dominion Bank's 2.375% medium-term notes due 2016 firmed 1 bp.

Both issues are trading stronger since issuance, including National Bank of Canada's covered bonds, which have come in more than 15 bps in trading since February.

Government bonds closed flat to higher on the day with yields down 2 bps to 3 bps on the longer end. The 10-year note yield fell 3 bps to 1.96%. The 30-year bond yield dropped 2 bps to 2.58%.

Transpower to hold roadshow

Transpower New Zealand (A1/AA-/) plans to hold a roadshow in Canada in the week ahead, sources said on Friday.

Scotia Capital Inc. will lead the non-deal roadshow, which starts on Monday in Montreal and ends on March 9 in Vancouver, B.C.

No specific bond deal has been reached, but the potential for a maple bond offering is high, sources said.

Transpower is a state-owned utility that supplies power to New Zealand towns and cities.

National Bank of Canada flat

In the U.S. secondary market, National Bank of Canada's 2.2% notes due 2016 (Aaa/AAA/) were seen flat on the day at 51 bps over Treasuries, a source said on Friday.

The notes are trading tighter since National Bank of Canada reopened the issue in a $600 million offering on Feb. 6 at a spread of 67 bps over Treasuries.

The financial services company is based in Montreal.

Toronto-Dominion tightens

Also in trading, Toronto-Dominion Bank's 2.375% senior notes due 2016 (Aaa/AA-/) firmed 1 bp to 80 bps on Friday, a source said.

TD reopened the issue on Nov. 3 and sold $600 million of the notes at 117 bps over Treasuries.

The bank and financial services company is based in Toronto.

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