Cards II Trust, Ontario, Ville de Montreal price; new paper firms; Cash Store 'well bid'

By Cristal Cody

Prospect News, Jan. 10 - Canadian issuers lived up to the promise of an active deal month with a handful of new offerings priced in the Canadian and U.S. bond markets on Thursday, while new bonds brought over the week traded better in the secondary market, informed sources said.

In the Canadian bond markets, Cards II Trust sold C$1 billion of three-year credit card receivables-backed notes; the Province of Ontario brought a C$1 billion offering of notes; and Ville de Montreal priced C$400 million in two tranches of debentures.

Across the border, TransCanada Pipelines Ltd. sold a U.S. dollar-denominated $750 million of three-year senior notes and Total Capital Canada Ltd. and Total Capital International priced $3.25 billion of notes in four tranches on Thursday.

"Still pretty busy," one market source said, noting that a lot of bonds were "moving back and forth amid a "reorganization of portfolios."

"Spreads are still feeling pretty good. It's a good thing we didn't have any more bank issuance - we had C$3.25 billion of bank issuance so far this week and that's kind of chunky for Canada."

Bank deposit notes sold earlier in the week are trading tighter in the secondary market, a trader said.

HSBC Bank Canada's 2.938% deposit notes due 2020 traded more than 3 basis points better.

Another bond source said the Canadian market is in good shape.

"We've seen some good follow-through buying," the source said. "All the new issues are going fairly well. Some of them were a bit of a struggle to get them done. There was a perception by some accounts that things are a little on the expensive side. But they're tightening in the secondary market."

John Deere Canada Funding Inc.'s 1.95% senior medium-term notes due 2016 priced the previous day traded flat to slightly better on the day.

Daimler Canada Finance Inc.'s new 2.23% notes due 2016 tightened about 2½ bps since the notes priced on Wednesday, a trader said.

Cash Store Financial Services Inc.'s bonds stayed "well bid" in trading following Standard & Poor's downgrade of the senior secured notes to B- from B, a high-yield bond trader said.

The Markit CDX Series 19 North American investment-grade index firmed 1 bp to a spread of 86 bps.

The Markit CDX Series 19 North American high-yield index rose to 102.65 from 102.32.

Government bonds traded lower over the day. Canada's 10-year note yield rose 5 bps to 1.96%. The 30-year bond yield closed 4 bps higher at 2.52%.

In economic news, Statistics Canada said municipalities issued C$6.2 billion of building permits in November, down 17.9% from October and the lowest level since January 2012.

Cards II sells C$1 billion

Cards II Trust sold C$1 billion of three-year credit card receivables-backed notes at par to yield 1.984% on Thursday, according to an informed source.

The series 2013-1 class A notes due Jan. 15, 2016 (Aaa/AAA/DBRS: AAA) priced at a spread of 65 bps over the Government of Canada bond curve.

The trust also was expected to sell series 2013-1 class B notes (Baa1/BBB/DBRS: BBB) in a separate tranche.

CIBC World Markets Inc. was the bookrunner.

The proceeds will be used to finance the purchase of an undivided co-ownership interest in the receivables of certain credit card accounts designated by CIBC.

Cards II Trust holds co-ownership interests in credit card receivables originated and serviced by Canadian Imperial Bank of Commerce.

John Deere details deal

John Deere Canada Funding sold C$200 million of 1.95% three-year senior medium-term notes at 99.858 to yield 2%, or a spread of 71.4 bps over the Government of Canada benchmark.

In the secondary market, the notes due Jan. 14, 2016 (A2//DBRS: A) traded at 69 bps bid, 67 bps offered, a source said.

TD Securities Inc. and RBC Capital Markets Corp. were the bookrunners.

The notes are unconditionally guaranteed by John Deere Capital Corp.

Proceeds will be used for general corporate purposes.

The company is a Canadian financing arm of John Deere Ltd.

TransCanada taps market

In the U.S. market, TransCanada Pipelines sold $750 million of 0.75% three-year senior notes (A3/A-/) on Thursday at a spread of Treasuries plus 45 bps, according to an FWP filing with the Securities and Exchange Commission.

Pricing was at 99.823 to yield 0.81%. There is a make-whole call at Treasuries plus 10 bps.

Bookrunners were Citigroup Global Markets Inc. and HSBC Securities USA Inc.

Proceeds will be used for general corporate purposes and to reduce short-term debt of the corporation and its affiliates.

TransCanada was last in the U.S. bond market with a $1 billion offering of 10-year notes on July 30, 2012.

The natural gas and oil pipeline and storage company is based in Calgary, Alta.

Total unit prices

Total Capital Canada and Total Capital International priced $3.25 billion of notes (Aa1/AA-/) in four parts in the U.S. market on Thursday, an informed source said.

The sale included $1 billion of three-year floating-rate notes priced at par to yield Libor plus 38 bps. The notes are non-callable.

A $1 billion tranche of 1.45% five-year notes was sold at 99.904 to yield 1.47% with a spread of 68 bps over Treasuries. Pricing was tight to talk in the 70 bps area, the source said.

There is a make-whole call at Treasuries plus 12.5 bps.

The third part was $1 billion of 2.75% notes due 2023 priced at 99.819 to yield 2.77% with a spread of Treasuries plus 88 bps. The notes were sold at the low end of guidance in the 90 bps area.

The tranche has a make-whole call at Treasuries plus 15 bps.

An added tranche came from Total Capital International, which reopened an issue of 0.75% notes due Jan. 25, 2016 to add $250 million. Pricing was at 99.734 to yield 0.84% with a spread of Treasuries plus 48 bps.

There is a make-whole call at Treasuries plus 10 bps.

Total issuance is $750 million, including $500 million priced at Treasuries plus 43 bps on Sept. 18, 2012.

Barclays, Bank of America Merrill Lynch and Morgan Stanley & Co. LLC were the active bookrunners.

Proceeds will be used for general corporate purposes.

The notes are guaranteed by parent company Total SA, based in Courbevoie, France.

The unit of the oil and gas company is based in Calgary, Alta.

Ontario raises C$1 billion

The Province of Ontario (Aa2/AA-/DBRS: AA) priced a C$1 billion offering of new 2.1% notes due Sept. 8, 2018 on Thursday at 99.882 to yield 2.122%, an informed source said.

The notes priced at a spread of 59.5 bps over the Government of Canada benchmark.

TD Securities Inc. was the lead manager.

Ville de Montreal active

Ville de Montreal priced C$400 million in two tranches of debentures (Aa2/A+/) on Thursday, according to an informed source.

The city sold C$250 million of 3.5% debentures due Sept. 1, 2023 at 99.401 to yield 3.568%, or a spread of 48 bps over the government benchmark.

Ville de Montreal also reopened its 4.25% debentures due Dec. 1, 2032 to sell C$150 million of the securities at 101.665 to yield 4.126%, or 52 bps over the benchmark. The city first priced C$165 million of the long debentures on April 11, 2012 at 100.654 to yield 4.202%, or a spread of 175 bps over the benchmark. The total outstanding is C$315 million.

National Bank Financial Inc., CIBC World Markets Inc. and Desjardins Securities Inc. were the lead managers.

Daimler Canada firms

Daimler Canada Finance's 2.23% notes due April 18, 2016 tightened in secondary trading to 92 bps bid, a bond source said on Thursday.

Daimler Canada Finance (A3/A-/DBRS: A) sold C$400 million of the notes at par to yield a spread of 94.5 bps over the Government of Canada benchmark.

The Montreal-based company is the Canadian financing arm for German automaker Daimler AG.

HSBC Bank Canada tightens

HSBC Bank Canada's 2.938% deposit notes due Jan. 14, 2020 firmed to 125 bps bid, a trader said on Thursday.

HSBC Bank Canada (Aa2/AA-/DBRS: AA) sold C$1.25 billion of the notes at a spread of 128.6 bps over the government benchmark.

The Vancouver, B.C.-based bank is a subsidiary of London-based banking and financial services company HSBC Holdings plc.

Cash Store trades

Cash Store Financial Services' 11½% senior secured notes due 2017 were quoted going out on the day at 74.5 bid.

"Still well bid at that level," the trader said.

Cash Store Financial Services sold C$132.5 million of the notes (B3/B/) on Jan. 24, 2012 at 94.608.

Standard & Poor's said on Thursday the downgrade was based on weaker earnings, slower growth and recent governance and accounting issues related to the consumer loan portfolio that the company purchased a year ago.

Edmonton, Alta.-based Cash Store Financial provides broker and short-term lending services.

Andrea Heisinger contributed to this review

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