Teranet, Trinidad Drilling, Quebec wrap sales; Quebecor Media to start roadshow for notes

By Cristal Cody

Prospect News, Dec. 9 - Teranet Holdings LP sold an upsized C$1.575 billion in four tranches of senior secured notes, while Trinidad Drilling Ltd. priced a $450 million issue of 7 7/8% eight-year senior notes on Thursday, according to sources.

Also in the Canadian bond market, the Province of Quebec sold an additional C$500 million in a reopening of its 5% notes due Dec. 1, 2041.

Meanwhile, Quebecor Media Inc. is expected to start a roadshow for C$250 million of senior unsecured notes due Jan. 15, 2021 on Monday, an informed source said.

But the biggest news of the day was Teranet's sale.

"Teranet was a big, big deal," one source said. "There's a rather large amount of bonds that are maturing in December and a fairly large coupon payment in December, so there's plenty of cash to reinvest and a lot of that is going back into the marketplace and providing the bid for a lot of these deals."

Teranet's sale was upsized from C$1.4 billion. The notes (DBRS: BBB/BBB+) were offered for sale in Canada and in the United States under Rule 144A.

The company sold C$475 million of 3.531% notes due Dec. 16, 2015 at par, or a spread of 106.1 basis points over the Government of Canada benchmark bond. The first tranche was upsized from C$400 million and was talked at a 105 bps spread.

Teranet sold a tranche of C$450 million 4.807% notes due Dec. 16, 2020 at par, or a spread of 156 bps over the Canadian government benchmark. The second tranche also was upsized from C$400 million. The notes were talked at a 150 bps area spread.

In the third tranche, C$450 million of 5.574% bonds due Dec. 17, 2040 priced at par to yield 200.1 bps over the Canadian government benchmark. The 30-year bonds were upsized from C$400 million. Guidance was pegged at a spread in the 200 bps area.

Teranet sold the last tranche of C$200 million of 3.27% notes due Dec. 1, 2031 at 99.986 to yield 3.271%. The notes priced at spread of 192.1 bps over the Canadian government benchmark.

The tranche was talked at a spread of 195 bps.

Scotia Capital Inc., BMO Capital Markets Corp. and RBC Capital Markets Corp. were the lead managers.

Proceeds will be used to repay debt.

Toronto-based Teranet owns the Province of Ontario's electronic land registration system.

Trinidad Drilling prices

In high-yield bonds, Trinidad Drilling priced a $450 million issue of 7 7/8% eight-year senior notes (B2/BB-/) at 99.246 to yield 8% on Thursday, according to an informed source.

The yield printed at the tight end of the 8% to 8¼% price talk.

Wells Fargo Securities was the left bookrunner. RBC Capital Markets and TD Securities were the joint bookrunners.

The proceeds from the sale will be used to redeem the C$354 million 7¾% convertible unsecured subordinated debentures due July 2012 and to repay a portion of the debt outstanding from the existing revolving credit facilities and term loans due in 2012.

As part of the sale, the company expects to enter into a new two-part senior secured revolver that expires in December 2014 and includes a C$200 million revolving tranche and US$100 million revolving tranche.

Trinidad Drilling said the purpose of the offering and the new credit facility will be to simplify the company's capital structure by the elimination of the debentures; provide flexibility in the balance sheet through penalty-free debt repayment under the new credit facility over the next four years; extend maturities from 2012 to 2014 and early 2019 and allocate debt between U.S. and Canadian dollars.

In secondary trading, the new bonds were seen as high as 101.25 bid, 101.75 offered, a source said.

Trinidad Drilling is a Calgary, Alta.-based provider of oil and gas drilling equipment.

Quebec sells C$500 million

The Province of Quebec sold an additional C$500 million in a reopening of its 5% notes due Dec. 1, 2041 at 106.224 to yield 4.62% on Thursday, a source said.

The notes priced at a spread of 88 bps over the Government of Canada benchmark bond.

National Bank Financial Inc. was the lead manager.

The issue now has C$5.5 billion outstanding.

Quebecor Media roadshow eyed

Coming up, Quebecor Media is expected to start a roadshow for C$250 million of senior unsecured notes due Jan. 15, 2021 on Monday, an informed source said.

The roadshow starts Monday in Toronto and continues Tuesday in Montreal. The notes will be sold under Rule 144A.

Scotia Capital Inc., TD Securities Inc. and National Bank Financial Inc. are the lead managers.

The notes will have a change-of-control put at 101%.

Proceeds will be used by subsidiary Sun Media Corp. to redeem and retire all outstanding Sun Media notes in February and to finance the settlement and termination of related hedging contracts.

Montreal-based Quebecor Media is a subsidiary of Quebecor Inc., one of Canada's largest communications and media companies.

Paul Deckelman and Paul A. Harris contributed to this review

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