Aimia sells C$250 million; Canadian and U.S. dollar deals forecast; banks down; 407 widens

By Cristal Cody

Prospect News, May 14 - Market tone stayed weaker on Monday, but the Canadian bond markets saw two notes price, and more are expected over the week, sources said.

Aimia Inc.'s offering of C$250 million of 5.6% seven-year senior secured notes "tightened at the full 5 [bps]" when the deal priced on Monday, an informed source said. The paper traded 3 bps tighter later in the secondary market.

Northland Power Inc. also brought C$120 million of preferred stock on Monday.

Primary activity for the week is expected stay active in the Canadian and the U.S. markets, sources said.

"There's a couple of things lined up," a Canadian syndicate source said. "We're expecting a P-3 deal and we're expecting an auto lease deal - hopefully this week, as long as the market doesn't completely fall apart."

Ford Auto Securitization Trust is expected to sell C$540.11 million in six tranches of series 2012 R1 asset-backed notes guaranteed by the Ford Motor Credit Co. LLC.

In the U.S. market, Canadian issuers have a couple of deals in the works.

Inmet Mining Corp. upsized its offering of eight-year senior notes (B1/B+) to $1.5 billion from $1 billion, with pricing expected on Tuesday.

HudBay Minerals Inc. will hold a roadshow this week for an offering of $400 million of eight-year senior notes.

Market activity mostly was light on Monday, and bonds remained weaker.

The Markit CDX Series 18 North American investment-grade index eased 6 basis points to a spread of 115 bps on Monday.

"The secondary market is brutally quiet," a source said. "Spreads are out 5ish in general."

Bank and financial paper traded wider on the day, on average out about 5 bps from Friday in continued fallout from JPMorgan Chase & Co.'s $2 billion trading loss announced late last week, sources said.

Royal Bank of Canada's 2.98% notes due 2019 priced earlier in the month traded about 8 bps wider on the day.

407 International Inc.'s 4.19% 30-year senior secured medium-term notes priced in late April are trading nearly 10 bps wider.

"The market's fairly weak," a bond source said.

Government bonds were stronger on continued concerns with European and Greek debt. Canada's 10-year note yield dropped 3 bps to 1.94%. The 30-year bond yield fell 2 bps to 2.45%.

Aimia prices C$250 million

Aimia sold C$250 million of 5.6% seven-year senior secured notes at 99.926 to yield 5.613% on Monday, a syndicate source said.

The series 4 notes due May 17, 2019 (/BBB-DBRS: BBB) priced at a spread of 395 bps over the Canadian bond curve, at the tight end of talk, which was 400 bps plus or minus 5 bps.

CIBC World Markets Inc., RBC Capital Markets Corp. and TD Securities Inc. were the lead managers.

Proceeds will be used to repay the amount outstanding under the company's $200 million secured revolving credit facility with a term maturing on April 13, 2013 and for general corporate purposes.

The notes were seen 3 bps tighter in the secondary market late afternoon.

Montreal-based Aimia, formerly known as Groupe Aeroplan Inc., operates loyalty service management programs, including Aeroplan Canada for flight points on Air Canada and Star Alliance carriers, across the globe.

Northland Power taps market

Northland Power (/BBB-/) said on Monday that it sold C$120 million of cumulative rate reset preferred shares to yield a 5% annual dividend for the initial fixed-rate period through Dec. 31, 2017.

Northland Power sold 4.8 million shares of the series 3 preferred stock at C$25.00 per share.

CIBC World Markets, BMO Capital Markets Corp. and Scotia Capital Inc. were the lead managers.

The dividend rate will reset on Dec. 31, 2017 and every five years thereafter at a rate equal to the then five-year Government of Canada bond yield plus 346 bps.

The shares are redeemable on or after Dec. 31, 2017.

Proceeds will be used to fund the equity portion of the company's first six ground mounted solar projects, to fund additional ground mounted solar project development, to repay bank debt, to replenish working capital and for general corporate purposes.

Toronto-based Northland Power builds, owns and operates power generation projects in the provinces of Ontario, Quebec and Saskatchewan.

Ford Auto Trust eyes market

Ford Auto Securitization Trust plans to price C$540.11 million in six tranches of series 2012 R1 asset-backed notes guaranteed by the Ford Motor Credit Co. LLC this week, sources said.

The deal includes C$186.79 million of class A1 notes due 2014 (DBRS: AAA); C$214.35 million of class A2 notes due 2016 (DBRS: AAA); C$101.9 million of class A3 notes due 2017 (DBRS: AAA); C$15.89 million of class B notes due 2017 (DBRS: AA); C$10.59 million of class C notes due 2017 (DBRS: A) and C$10.59 million of class D notes due 2018 (DBRS: BBB).

BMO Capital Markets, CIBC World Markets, RBC Capital Markets and Scotia Capital are the managers.

Proceeds will be applied by the trust to finance the purchase of a pool of retail conditional sale contracts secured by new and used cars, light trucks and utility vehicles acquired by Ford Credit Canada Ltd., the Canadian financing arm of the Ford Motor Co.

Inmet upsizes to $1.5 billion

Inmet Mining upsized its offering of eight-year senior notes (B1/B+) to $1.5 billion from $1 billion and set yield talk at 8¼% to 8½% on Monday, according to a market source.

The books close at noon ET on Tuesday, and the deal is set to price thereafter.

Global coordinator J.P. Morgan Securities LLC will bill and deliver. Credit Suisse Securities (USA) LLC is also a global coordinator.

Bank of America Merrill Lynch, Citigroup Global Markets, Morgan Stanley & Co. and RBC Capital Markets are joint bookrunners.

CIBC World Markets and Scotia Capital are co-managers.

The Rule 144A and Regulation S for life notes come with four years of call protection.

The Toronto-based mining company plans to use the proceeds to fund development capital for the Cobre Panama project and for general corporate purposes.

HudBay Minerals starts roadshow

Toronto-based HudBay Minerals will conduct a roadshow through Friday for its $400 million offering of eight-year senior notes (expected ratings B3/B), according to a syndicate source.

Bank of America Merrill Lynch is the bookrunner.

CIBC World Markets, Scotia Capital, TD Securities, Credit Suisse Securities (USA) LLC, RBC Capital Markets, NBCF, SG CIB, Cormark, GMP, Macquarie and Stifel, Nicholas are the co-managers.

The Rule 144A and Regulation S for life notes come with four years of call protection and feature a 101% poison put.

The integrated mining company plans to use the proceeds for general corporate purposes, as well as for development projects in Manitoba and, if approved, the development of the Constancia project.

HudBay Minerals produces copper concentrate, containing copper, gold and silver. The company also produces zinc metal.

Royal Bank of Canada weaker

In Canada's secondary market, the 2.98% deposit notes due May 7, 2019 that Royal Bank of Canada (Aa1/AA-/DBRS: AA) sold on May 2 traded wider at 128 bps on Monday, a source said.

RBC sold C$1 billion of the seven-year notes at a spread of 120 bps over the Canadian bond curve.

Toronto-based Royal Bank of Canada is a financial services company.

407 International widens

In other trading, 407 International's 4.19% senior secured medium-term notes due 2042 widened to 165 bps bid, 160 bps offered, a source said on Monday.

The company sold C$400 million of the 30-year series 12-A1 notes (DBRS: A) at a spread of 156 bps over the Canadian government benchmark on April 20.

The Woodbridge, Ont.-based toll highway operator is owned by a consortium that includes Cintra Infraestructuras, the Canada Pension Plan Investment Board and SNC-Lavalin Inc.

Paul A. Harris contributed to this review

© 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.