Westcoast Energy sells C$250 million; Algonquin Power prices; Paramount sets price talk

By Cristal Cody

Prospect News, Nov. 28 - Annual Canadian issuer Westcoast Energy Inc. sold C$250 million of 10-year medium-term notes on Wednesday, while the high-yield market geared up for a new deal from Paramount Resources Ltd., according to an informed source.

Westcoast Energy last tapped the Canadian debt markets in October 2011 and November 2010.

Algonquin Power Co. priced an upsized C$150 million of 4.82% senior debentures due Feb. 15, 2021 late Wednesday afternoon at a spread of 325 basis points over the Government of Canada bond curve, tighter than talk in the 330 bps area.

Paramount Resources Ltd. talked its offering of C$250 million of seven-year senior notes to yield in the 7 5/8% area with pricing expected on Thursday, an informed bond source said.

"Pricing mid 7s," a source said earlier in the day.

The debt markets on Wednesday seemed "pretty stable," one source said.

Bonds traded in slightly.

The Markit CDX Series 18 North American investment-grade index firmed 1 bp to a spread of 101 bps.

The Markit CDX Series 18 North American high-yield index rose to 99.62 from 99.33.

Government bonds ended with modest gains as yields fell 1 bp across the curve. The Canadian 10-year note yield ended 1 bp lower at 1.72%. The 30-year bond yield fell to 2.30% from 2.31%.

Westcoast Energy taps market

Westcoast Energy priced C$250 million of 3.12% 10-year medium-term notes at 99.966 to yield 3.124% on Wednesday, according to an informed source.

The notes due Dec. 5, 2022 (/BBB+/DBRS: A) priced at a spread of 135 bps over the interpolated Government of Canada bond curve.

CIBC World Markets Inc. was the bookrunner.

The Vancouver, B.C.-based natural gas processor and distributor is a subsidiary of Houston-based Spectra Energy Corp.

Westcoast Energy last tapped the Canadian debt markets a year ago. The company sold C$300 million of medium-term notes in two tranches on Oct. 25, 2011. The offering included C$150 million of 3.883% 10-year notes and C$150 million of 4.791% 30-year notes.

Algonquin Power prices

Algonquin Power sold an upsized C$150 million of 4.82% senior debentures due Feb. 15, 2021 on Wednesday at 99.94 to yield 4.83% in a Canadian private placement, an informed source said.

The debentures (/BBB-/DBRS: BBB) priced at a spread of 325 bps over the Government of Canada bond curve, tighter than talk in the 330 bps area. The deal was upsized from C$120 million.

National Bank Financial Inc. and BMO Capital Markets Corp. were the lead managers.

Oakville, Ont.-based Algonquin Power, a subsidiary of Algonquin Power & Utilities Corp., owns and operates regulated and non-regulated water, electricity and natural gas utilities in Canada and the United States.

Paramount guidance emerges

Paramount Resources talked its offering of C$250 million of seven-year senior notes (Caa1/B/) to yield in the 7 5/8% area as the company wrapped up a three-day roadshow on Wednesday, an informed bond source said.

The notes are expected to price on Thursday in the Canadian provinces except Quebec and as a private placement in the U.S. high-yield market.

RBC Dominion Securities Inc., Scotia Capital Inc. and BMO Nesbitt Burns Inc. are the bookrunners.

The notes are guaranteed by the Calgary, Alta.-based oil and natural gas developer's restricted subsidiaries.

The notes have a 101% change-of-control put and a Canadian call at 100 bps over the Government of Canada benchmark.

The issue will be non-callable for three years.

Proceeds will be used to repay debt under the credit facility, for capital expenditures and for general corporate purposes.

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