Wells Fargo Canada, BMW Canada, University of Toronto sell bonds; Wells Fargo notes firm

By Cristal Cody

Prospect News, Feb. 2 - Deal activity for February, only two days in, remains high in the Canadian bond markets with three issuers out on Thursday amid robust demand, bond sources said.

"There are a lot of issuers who would like to get their funding done quickly and out of the way," one source said.

Wells Fargo Canada Corp. sold an upsized C$1.5 billion of 2.774% five-year medium-term notes, BMW Canada Inc. raised C$450 million in two tranches of bonds and the University of Toronto sold an upsized C$100 million of 4.251% long debentures.

The deals follow a C$500 million offering of five-year bonds on Wednesday from Ford Credit Canada Ltd.

"There's been a lot of financials and a decent amount of auto," a source said.

The two corporate deals on Thursday from Wells Fargo Canada and BMW Canada saw "good investor demand in both cases," one syndicate source said. "Both printed at the very maximum the issuers wanted."

Deal activity likely will slow on Friday since the market will be watching for key U.S. employment data, a source said. The Labor Department releases its monthly non-farm payroll report early Friday.

In the secondary market, Wells Fargo Canada's notes traded in tighter, a source said.

Canadian government bonds ended lower over the day. The 10-year note yield rose 4 basis points to 1.94%. The 30-year bond yield traded higher at 2.55% from 2.51%.

Wells Fargo Canada prices

Wells Fargo Canada (A2/A+/DBRS:AA) priced an upsized C$1.5 billion of 2.774% five-year medium-term notes at par on Thursday, bond sources said.

"The new issue saw participation from over 70 buyers with average non-early order fills in the area of 20%," a source said.

The notes due Feb. 9, 2017 priced at a spread of 145 bps over the Government of Canada bond curve.

The deal was launched at C$750 million and a spread of 150 bps, plus or minus 5 bps.

Strong demand helped the deal price at the tight end of initial spread guidance, a source said.

CIBC World Markets Inc., BMO Capital Markets Corp. and RBC Capital Markets Corp. were lead managers. TD Securities Inc. was a co-manager.

The notes are unconditionally guaranteed by Wells Fargo & Co.

In the secondary market, the notes traded tighter at 146 bps bid after pricing at 150.4 bps over the Canadian government benchmark, a source said.

Wells Fargo Canada is an affiliate of Wells Fargo & Co.

BMW Canada sells two tranches

BMW Canada (A3) sold C$450 million in two tranches of bonds on Thursday, an informed source said.

BMW sold C$250 million 2.64% notes due Aug. 10, 2015 at 99.997 to yield 2.641%, or a spread of 149 bps over the Government of Canada bond curve.

In the second tranche, BMW sold C$200 million 2.88% notes due Aug. 9, 2016 at 99.996 to yield 2.881%, or a spread of 161 bps over the curve.

TD Securities and HSBC Capital (Canada) Inc. were the lead managers.

The Ontario-based auto distributor is a subsidiary of BMW Group.

University of Toronto active

Also in the market on Thursday, the University of Toronto sold an upsized C$100 million of 4.251% long debentures at a spread of 65 bps over the Ontario benchmark, a bond source said.

The sale of the debentures due Dec. 7, 2051 (DBRS: AA) was upsized from C$50 million.

Scotia Capital Inc. and National Bank Financial Inc. were the lead managers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.