Canada ends September on quiet note; Agrium debentures firm; Sherritt flat; Cash Store up

By Cristal Cody

Prospect News, Sept. 28 - Canadian bond markets slowed on Friday ahead of the weekend among month-end cleanup, bond sources said.

CNH Capital Canada Receivables Trust sold series 2012-1 class A notes (Aaa//DBRS: AAA) and series 2012-1 class B receivable-backed notes (A1//DBRS: A) in a private placement, a bond source said.

Additional pricing information was not available by press time.

The notes are backed by a pool of retail loan contracts secured by agriculture and construction equipment originated by CNH Capital Canada Ltd., an agricultural and construction equipment lending company.

Canadian issuer First Quantum Minerals Ltd. started a roadshow in London on Friday for a $350 million offering of seven-year senior notes, according to an informed source.

Agrium Inc.'s debentures firmed in secondary trading a day after the new debt widened 7 basis points on Wednesday, a trader said.

"Five basis points tighter than yesterday," the trader said.

In the high-yield market in Canada, Sherritt International Corp.'s new debentures traded mostly unchanged to slightly lower on the week but were still higher than where they priced a week ago, one source said.

Also in trading, Cash Store Financial Services Inc.'s notes jumped 4 points on the week.

Corporate bonds overall traded mostly flat on Friday.

"Today, it was a little bit weaker," an investment-grade bond source said. "It's been a very quiet trading session."

The Markit CDX Series 18 North American investment-grade index closed flat at a spread of 99 bps.

The Markit CDX Series 18 North American high-yield index dipped to 99.81 from 99.93.

Canadian government bonds traded up on Friday with yields lower across the curve.

The 10-year note yield fell 2 bps to 1.73%. The 30-year bond yield ended 3 bps lower at 2.32%.

In economic data, Statistics Canada said the real gross domestic product rose 0.2% in July after it increased 0.1% in June.

Agrium tightens

Agrium's 3.15% debentures due Oct. 1, 2022 traded 5 bps better on the day at 147 bps bid, 142 bps offered, a trader said on Friday.

The company sold $500 million of the debentures (Baa2/BBB/BBB+/DBRS: BBB) on Monday at a spread of Treasuries plus 145 bps.

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

Sherritt flat

Sherritt International's 7½% senior debentures due Sept. 24, 2020 traded mostly flat on Friday at 102.25 bid, a bond source said.

The company sold C$500 million of the debentures (DBRS: Provisional BB) at par to yield 7½% on Sept. 19.

Toronto-based Sherritt produces coal, oil, gas and power and mines and refines nickel.

Cash Store jumps

Cash Store's 11½% senior secured notes due 2017 climbed 4 points on the week to 100 bid on Friday, a bond source said.

The company sold C$132.5 million of the notes (B3/B/) on Jan. 24, 2012 at 94.608.

Edmonton, Alta.-based Cash Store Financial provides broker and short-term lending services.

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