Alberta, Quebec price; Trilogy Energy plans high-yield offering; Paramount, RBC better

By Cristal Cody

Prospect News, Nov. 30 - Canadian provinces got into the week's busy deal action with two offerings on Friday from Quebec and Alberta, while Trilogy Energy Corp. announced plans for a C$250 million high-yield deal.

The Province of Alberta sold C$275 million in a reopening of its 4% seven-year debentures, while the Province of Quebec raised C$500 million of 3% medium-term notes due 2023.

"No corporates today," one source said.

The deal pipeline in December is expected to stay active up until about the third week of the month, sources said.

"There's definitely always room for opportunistic funding given the low rates," one source said.

In the week ahead, Trilogy Energy plans to sell C$250 million of seven-year senior notes (/B/DBRS: B) following a roadshow.

"Still marketing going on," an informed source said of the offering.

The Trilogy Energy deal is expected to be the last high-yield offering in the Canadian markets, a bond source said.

"This is it for the year," the source said.

In the secondary market, Paramount Resources Ltd.'s new 7 5/8% senior notes due Dec. 4, 2019 (Caa1/B/) that priced on Thursday traded flat on the day but still higher than issuance.

Royal Bank of Canada's new three-year covered bonds that were sold in the U.S. high-grade market traded one-half of a basis point better on the day.

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

The Markit CDX Series 18 North American high-yield index closed higher at 99.99 from 99.67.

Canadian government bonds ended better with yields down 1 bp across the curve on weaker economic data. Canada's 10-year note yield ended at 1.7%, while the 30-year bond yield closed at 2.29%.

Statistics Canada said in a report the real gross domestic product rose 0.1% in the third quarter, compared to 0.4% growth in the second quarter.

Quebec prices C$500 million

The Province of Quebec (Aa2/A+/DBRS: A) sold C$500 million of 3% medium-term notes due Sept. 1, 2023 on Friday at 99.997 to yield 3%, an informed source said.

The notes priced at a spread of 119.5 bps over the Government of Canada benchmark.

National Bank Financial Inc. was the bookrunner.

The province was last in the Canadian debt markets on Nov. 1 with a C$500 million add-on to its 3.5% medium-term notes due Dec. 1, 2022.

Alberta reopens debentures

The Province of Alberta (Aaa/AAA/DBRS: AAA) brought a C$275 million reopening of its 4% seven-year debentures on Friday at 112.288 to yield 2.099%, an informed source said.

The debentures due Dec. 1, 2019 priced at a spread of 66 bps over the Government of Canada benchmark.

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

The province first sold the issue in September 2009. The total outstanding is C$1,375,000,000.

Trilogy to sell C$250 million

Trilogy Energy's C$250 million offering of seven-year senior notes (/B/DBRS: B) is talked to yield in the low to mid 7% area, an informed source said on Friday.

The company plans to hold a roadshow in Toronto on Monday through Wednesday and in Boston on Thursday.

Scotia Capital Inc., RBC Capital Markets and BMO Capital Markets Corp. are the joint bookrunners.

The Rule 144A-eligible notes due 2019 will price as a private placement.

The issue is guaranteed by the company's restricted subsidiaries.

The notes will be non-callable for three years. The offering has a 101% change-of-control put and a Canadian call at 100 bps over the Government of Canada benchmark.

The deal is expected to close on Dec. 14.

The Calgary, Alta.-based petroleum and natural gas-focused energy corporation plans to use the proceeds for a non-permanent repayment of debt under Trilogy's existing credit facility, capital expenditures and general corporate purposes.

Paramount Resources up

Paramount Resources' 7 5/8% senior notes due Dec. 4, 2019, which priced in a C$300 million offering on Thursday at par and had traded higher in the secondary market, traded on Friday at par bid, 100.5 offered, a trader said.

"Kind of unchanged," the source said.

Calgary, Alta.-based Paramount Resources is an oil and natural gas exploration, development and production company.

RBC firmer

The Royal Bank of Canada's covered bonds due 2015 (Aaa//AAA) traded in early on Friday to 31 bps bid, 30 bps offered, a trader said.

The bank sold $1.5 billion of the bonds at par to yield a spread of 31.5 bps over Treasuries.

The financial services company is based in Toronto.

© 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.