CIBC, Agrium sell U.S. dollar deals; Golden Credit Card to tap U.S., Canadian markets

By Cristal Cody

Prospect News, Sept. 24 - Most of the day's bond activity centered on the U.S. markets with deals from Canadian Imperial Bank of Commerce and Agrium Inc., bond sources said.

"Issuance went to the U.S. market, but here in Canada, it's semi-quiet," one source said. "Issuance is supposed to be quiet here in Canada this week."

Many Canadian issuers, including the provinces, will attend a Euromoney Canadian debt capital markets investor conference hosted in New York on Tuesday, sources note.

One offering is expected from Golden Credit Card Trust, which plans to sell U.S. and Canadian dollar senior floating-rate and credit card receivables-backed notes on Tuesday, according to a bond source.

"Looks like it's going to be C$800, C$900 million," the source said.

CIBC's new $1 billion issue of three-year senior notes priced late on Monday, and traders saw no aftermarket activity.

Agrium brought a $500 million offering of 10-year debentures that tightened 3 basis points in the secondary market, a trader said.

In other trading, Valeant Pharmaceuticals International Inc.'s junk-rated 6 3/8% notes due 2020 sold the previous week were better.

No secondary activity was seen in the Province of Ontario's $1.25 billion offering of 1.65% seven-year global notes (Aa2/AA-/) that priced on Thursday to yield mid-swaps plus 44 bps, or Treasuries plus 55.75 bps, a trader said.

Trading mostly was lighter on Monday in the Canadian and U.S. markets, bond sources said.

"Very light volumes," one trader said.

The Markit CDX Series 18 North American investment-grade index ended at a spread of 98 bps.

The Markit CDX Series 18 North American high-yield index closed the day at 101.19.

Government bonds started the week higher. Canada's 10-year note dropped 3 bps to 1.82%. The 30-year bond yield closed lower at 2.39% from 2.42% on Friday.

CIBC prices $1 billion

CIBC sold $1 billion of 0.9% three-year senior notes on Monday to yield Treasuries plus 57 bps, an informed source said.

The notes (Aa2/A+/AA-) were priced at 99.97 to yield 0.91%. There is no call option.

Citigroup Global Markets Inc., CIBC World Markets Corp., UBS Securities LLC and Wells Fargo Securities LLC were the bookrunners.

Co-managers were Bank of America Merrill Lynch, Barclays, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

Proceeds are being added to the bank's funds for general corporate purposes.

The diversified financial institution is based in Toronto.

Agrium sells 10-year paper

Agrium sold $500 million of 3.15% 10-year debentures on Monday at a spread of Treasuries plus 145 bps, a source away from the trade said.

The notes (Baa2/BBB/BBB+/DBRS: BBB) were priced at 99.804 to yield 3.173%.

The notes feature a make-whole call at Treasuries plus 25 bps until July 1, 2022, with a par call after that date. There is also a change-of-control put at 101%.

Bank of America Merrill Lynch, RBC Capital Markets LLC and Scotia Capital USA Inc. were the bookrunners.

Co-managers were ANZ Securities Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., RBS Securities Inc. and UBS Securities.

Proceeds will be used to fund capital expenditures and for general corporate purposes.

In the secondary market, Agrium's debentures firmed to 142 bps bid, 139 bps offered, a trader said.

The retailer of agricultural products is based in Calgary, Alta.

Golden Credit Card on tap

Golden Credit Card Trust is expected to bring an offering of about C$800 million to C$900 million of U.S. and Canadian dollar-denominated senior floating-rate and credit card receivables-backed notes on Tuesday, according to a bond source.

The trust plans to sell series 2012-5 notes that include a U.S. dollar-denominated tranche of credit card receivables-backed senior notes (Aaa//DBRS: AAA) and a Canadian dollar-denominated tranche of credit card receivables-backed subordinated notes (Baa1//DBRS: BBB).

The bank also expects to price a series 2012-6 offering that includes a tranche of U.S. dollar-denominated senior floating-rate notes (Aaa//DBRS: AAA) and a tranche of Canadian dollar-denominated subordinated notes (Baa1//DBRS: BBB).

RBC Capital Markets is the bookrunner.

A cross-currency, interest rate swap is expected to be in place for the senior notes.

Golden Credit Card Trust, a pool of MasterCard and Visa credit card receivables managed by Toronto-based Royal Bank of Canada, will use the proceeds to finance undivided co-ownership interests in the receivables of certain credit card accounts.

Valeant Pharmaceuticals rises

Valeant Pharmaceuticals' 6 3/8% notes due 2020 rose to 101.75 bid, 102.25 offered in the secondary market on Monday, a trader said.

The company priced $2.25 billion of eight-year senior notes (B1/BB-) at par to yield 6 3/8% in two tranches that came with identical terms on Thursday.

Valeant Pharmaceuticals sold $500 million. Subsidiary VPI Escrow Corp. priced $1.75 billion.

The issuer is a Mississauga, Ont.-based specialty pharmaceutical company.

Andrea Heisinger contributed to this review

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