Mattamy to market $450 million dual-currency notes; Trident, Connacher rise, Baytex flat

By Cristal Cody

Prospect News, Oct. 26 - The Canadian bond markets ended the week on a quiet note with no primary activity on Friday as issuers count down to the Oct. 31 fiscal year-end, sources said.

"Pretty slow," one source said. "Market tone is holding in. Banks are just trying to finish the year-end."

Moody's Investors Service said late Friday that it placed the long-term ratings of six Canadian banks on review for downgrade because of challenges "not fully captured in their current ratings."

The banks placed on review include the Bank of Montreal, the Bank of Nova Scotia, Caisse Centrale Desjardins, Canadian Imperial Bank of Commerce, National Bank of Canada and Toronto-Dominion Bank.

"I think they just put the entire Canadian banks under the review," a source said. "It just came out - we'll have to see how the market reacts."

New issuance is expected to stay light in the week ahead until the fiscal year-end is wrapped up.

Mattamy Group Corp. plans to start a roadshow on Monday for a U.S. dollar- and Canadian dollar-denominated $450 million equivalent offering of eight-year senior notes, according to a syndicate source.

Bonds in the energy sector traded mostly better over the week, despite earlier losses on concerns than Canada will reject takeovers by foreign companies after regulators did not approve a C$5.2 billion bid for Calgary, Alta.-based Progress Energy Resources Corp. by Malaysia's oil and gas company Petronas.

Paper from Trident Exploration Corp. rose 2 points, while Connacher Oil & Gas Ltd.'s Canadian dollar-denominated bonds gained about ½ of a point on the week, a source said. Baytex Energy Corp.'s senior debentures traded flat but stronger than where the debt priced in early July.

The Markit CDX Series 18 North American investment-grade index ended unchanged at a spread of 98 basis points.

The Markit CDX Series 18 North American high-yield index slipped to 99.30 from 99.44.

Government bonds rose on Friday on weaker U.S. corporate earnings and concerns about future economic growth. Canada's 10-year note yield dropped 5 bps to 1.84%. The 30-year bond yield fell 4 bps to 2.42%.

Mattamy plans roadshow

Mattamy Group plans to start a roadshow on Monday for a $450 million equivalent offering of eight-year senior notes, according to a syndicate source.

The deal, which will come in dollar-denominated and Canadian dollar-denominated notes, is expected to price late in the Oct. 29 week.

Credit Suisse Securities (USA) LLC, RBC Capital Markets and Citigroup Global Markets are the joint bookrunners.

The Rule 144A for life notes will become callable in three years at par plus 75% of the coupon. They feature a three-year 35% equity clawback and a 101% poison put.

The Burlington, Ont.-based homebuilder plans to use the proceeds to refinance existing debt.

Trident better

Trident Exploration's 8¼% senior notes due April 13, 2018 rose 2 points in secondary trading over the week to 97 bid, a source said.

Trident Exploration sold C$175 million of the notes (/B/) at par on April 11, 2011.

The company is a subsidiary of Trident Resources Corp., a Calgary, Alta.-based natural gas exploration company.

Connacher rises

Connacher Oil's Canadian 8¾% senior notes due 2018 (Caa2/BB-/) traded up on Friday at 85.25 bid, up ½ point on the week and higher than where the notes were seen at 84 bid on Wednesday, according to a bond source.

The company sold C$350 million of the notes on May 20, 2011 at par.

The integrated oil company is based in Calgary, Alta.

Baytex unchanged

Baytex Energy's 6 5/8% senior debentures due 2022 (B1/BB-/) ended flat on the week at 107.5 bid, a source said on Friday.

The company sold C$300 million of the series C debentures at par on July 10.

Calgary, Alta.-based Baytex is an energy exploration and production company.

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.