Wells Fargo, Great Canadian Gaming, TransLink bring bond deals; Wells Fargo, Baytex better

By Cristal Cody

Prospect News, July 18 - Wells Fargo Canada Corp., Great Canadian Gaming Corp. and South Coast British Columbia Transportation Authority brought more than C$2 billion in bond deals on Wednesday, informed sources said.

Wells Fargo Canada sold an upsized C$1.5 billion of 2.944% seven-year medium-term notes tighter than guidance.

Great Canadian Gaming priced an upsized C$450 million of junk bonds following its roadshow in the Canadian and U.S. markets.

"The amount of buyers was very big," one source said. "The book was three times oversubscribed. It gives a good idea to the demand there."

Also in the market on Wednesday, South Coast British Columbia Transportation Authority (TransLink) sold C$150 million in a reopening of its 40-year senior notes.

Enbridge Pipelines Inc.'s unusual 100-year offering the previous day came about 30 basis points to 32 bps wider than its existing 40-year bond, an informed source said.

Enbridge Pipelines sold C$100 million of 4.1% medium-term notes due July 18, 2112 (DBRS: A) at par to yield 185 bps over the Government of Canada benchmark on Tuesday.

Enbridge Inc. spokesman Jennifer Varey said the deal went to a single buyer.

The company is a unit of Enbridge Inc., a Calgary, Alta.-based oil and gas distributor and transportation company.

Enbridge Pipelines filed a short-form base shelf prospectus on Monday that allows it to raise C$1 billion through offerings of medium-term notes over the next 25 months.

In the secondary market, Wells Fargo's notes traded about 4 bps tighter.

Baytex Energy Corp.'s 6 5/8% debentures due 2022 traded stronger, while MEG Energy Corp.'s 10.5-year senior notes held onto gains in Wednesday's session.

The Markit CDX Series 18 North American investment-grade index firmed 3 bps to a spread of 108 bps.

The Markit CDX Series 18 North American high-yield index edged up to 96.79 from 96.49.

Government bonds recouped losses from Tuesday. Canada's 10-year note yield fell 2 bps to 1.62%. The 30-year bond yield dropped 3 bps to 2.24%.

Wells Fargo taps market

Wells Fargo Canada (A2/A+/DBRS: AA) priced an upsized C$1.5 billion of 2.944% seven-year medium-term notes at par, a syndicate source said.

The notes due July 25, 2019 priced within guidance of 160 bps, plus or minus 3 bps, at a spread of 158.2 basis points over the Government of Canada benchmark, or 157 bps over the Canadian bond curve.

The deal was upsized from C$750 million.

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

The notes are unconditionally guaranteed by Wells Fargo & Co.

Wells Fargo Canada last tapped the Canadian debt markets on Feb. 2 with a C$1.5 billion offering of 2.774% medium-term notes due Feb. 9, 2017 priced at par, or a spread of 145 bps over the Government of Canada bond curve.

In the secondary market, the notes traded about 4 bps tighter at 154 bps bid, a source said.

The company is a Canadian arm of San Francisco-based Wells Fargo & Co.

Great Canadian Gaming prices

Great Canadian Gaming came with an upsized C$450 million of 10-year senior notes (B1/BB+/) on Wednesday at par to yield 6 5/8%, or a spread of 499.6 bps over the Government of Canada benchmark, an informed bond source said.

The notes due July 25, 2022 priced tighter than guidance of 6¾%, plus or minus 12.5 bps.

The deal was upsized from C$400 million and had about 70 buyers.

Scotia Capital Inc. and HSBC Capital (Canada) Inc. were the bookrunners. BMO Capital Markets, CIBC World Markets and RBC Capital Markets were joint lead managers. National Bank Financial Inc. was the co-manager.

The issue is guaranteed by current and future material restructured subsidiaries and certain other restricted subsidiaries of Great Canadian.

The notes are non-callable for five years and then may be called in 2017 at par plus ½ the coupon, in 2018 at par plus 1/3 the coupon, in 2019 at par plus 1/6 the coupon and in 2020 and thereafter at par.

The issue has a 101% change-of-control put, an equity clawback for up to 35% in the first three years at par plus the coupon and a Canada call at the Canadian bond yield plus 100 bps.

Proceeds will be used to refinance the company's U.S. dollar-denominated $161.1 million senior secured tranche B term loans due February 2014 and $170 million senior subordinated notes due February 2015 and their related cross-currency interest rate swaps.

In secondary trading, Great Canadian Gaming's new notes "did very well," trading up to the 102 area and going out at 101.75-102.25, a trader said.

A second trader said it that "rallied" up to 102 to 102.5.

The Richmond, B.C.-based gaming, entertainment and hospitality company has operations in Canada and the United States.

TransLink reopens long bonds

The South Coast British Columbia Transportation Authority (TransLink) raised C$150 million in a reopening of its 3.85% 40-year senior notes at 102.302 to yield 3.738%, an informed bond source said.

The bonds due Feb. 9, 2052 (Aa2//DBRS: AA) priced at a spread of 148 bps over the Government of Canada benchmark.

RBC Capital Markets, BMO Capital Markets and National Bank Financial were joint lead managers. CIBC World Markets, Scotia Capital, TD Securities Inc. and Casgrain & Co. Ltd. were co-managers.

The company originally sold the issue on Feb. 2 in a C$100 million offering priced to yield 3.897%, or a spread of 134.5 bps over the government benchmark. The total outstanding now is C$250 million.

TransLink is the regional transportation authority for Metro Vancouver, B.C.

Birchcliff Energy prices

Also in the market on Wednesday, Birchcliff Energy Ltd. announced that it raised C$50 million in an offering of 2 million preferred units.

The deal was upsized from C$40 million.

The deal included one series A cumulative five-year rate reset preferred share and three common share purchase warrants that each provided the right to purchase one common share in the capital of Birchcliff at $8.30 per common share for a period of two years.

The units, which included 2 million preferred shares and 6 million warrants, priced at C$25.00 per unit.

GMP Securities LP, Cormark Securities Inc. and National Bank Financial were the lead managers. Co-managers included HSBC Securities (Canada), Raymond James Ltd., Macquarie Group Ltd. and Peters & Co. Ltd.

The preferred stock was priced to yield a dividend of 8% per year for the initial five-year period that ends on Sept. 30, 2017. The dividend rate will be reset on Sept. 30, 2017 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 683 bps.

The preferred shares will be redeemable by the issuer on or after Sept. 30, 2017.

Proceeds will be used to reduce existing debt and for other general corporate purposes.

The Calgary, Alta.-based company is an oil and gas explorer, developer and producer.

Baytex stronger

In the secondary bond market, Baytex Energy's 6 5/8% debentures due 2022 traded higher at 103.25 bid, a source said on Wednesday.

The company sold C$300 million of the series C debentures (B1/BB-/) at par, or a spread of 496.8 bps over the Government of Canada benchmark on July 10.

Calgary, Alta.-based Baytex is an energy exploration and production company.

MEG Energy holds

In other trading, MEG Energy's notes due 2023 were seen "holding gains" in Wednesday's session after they had traded on Tuesday in the 101.375 to 102 range, a trader said.

The company sold the 10.5-year senior notes (B1/BB) at par to yield 6 3/8% on Monday.

In the secondary market, the notes traded higher at 101.375 bid, 101.625 offered, a trader said.

The Calgary, Alta.-based oil sands development company plans to use the proceeds for general corporate purposes, including funding capital investments.

Paul Deckelman contributed to this review

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