Lower Mattagami Energy plans C$1.9 billion total bonds for project

By Jennifer Chiou and Cristal Cody

New York, May 17 - Lower Mattagami Energy LP announced that along with its just-settled C$475 million two-part private placement of senior secured bonds, additional issues of bonds are anticipated to complete the forecasted C$1.9 billion of project financing.

According to a news release, the company plans to use the proceeds of additional placements to fund the redevelopment and expansion of four hydroelectric generating stations on the lower part of the Mattagami river in northeastern Ontario.

In the first placement of bonds (A2/DBRS: A), the company sold C$225 million of 4.331% series 2011-3 notes due May 18, 2021 at par, or a spread of 111.6 basis points over the Government of Canada benchmark, tighter than guidance of 114 bps. The 10-year notes have a call at 22 bps.

In the second tranche, the company sold C$250 million of 5.139% series 2011-4 bonds due May 18, 2041 at par, or a spread of 152 bps over the government benchmark. The bonds were talked at a spread of 154 bps. The long bonds have a call at 38 bps.

BMO Capital Markets Corp. and CIBC World Markets Inc. were the bookrunners.

Co-managers were National Bank Financial Inc., RBC Capital Markets Corp., Scotia Capital Inc., TD Securities Inc. and HSBC Capital (Canada) Inc.

Proceeds will also be used to refinance commercial paper notes and other indebtedness.

The company, part of Ontario Power Generation Inc., is a hydroelectric generator located on the Mattagami River.

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