Windsor Canada may bring debt offering following roadshow; markets eye potential supply

By Cristal Cody

Prospect News, Oct. 31 - Market activity in Canada stayed light on Wednesday as the U.S. markets reopened for the first trading day since Hurricane Sandy and its remnants struck the eastern United States and Canada.

"Today, a lot of the desks down south are not fully staffed so it's been another quiet one," a Canadian bond source said.

Windsor Canada Utilities Ltd. wrapped a two-day roadshow in Canada on Tuesday with a potential deal pricing late in the week, a bond source said.

There was "no guidance out yet," the source said. "It's really a potential private placement domestically. If tone is positive tomorrow and there's enough lead order interest from investors, [the deal] may launch tomorrow."

Brookfield Renewable Kwagis Holding Inc. sold C$175 million of senior secured bonds due Dec. 31, 2053 in a private placement in Canada earlier in the week.

Burlington, Ont.-based homebuilder Mattamy Group Corp. is underway in a roadshow for a U.S. dollar- and Canadian dollar-denominated $450 million equivalent of eight-year senior notes with pricing anticipated late in the week.

"It may be delayed with what's going on in the U.S.," a Canadian bond source said.

TransCanada Corp. also plans to be in the market with a potential debt offering to fund projects, but no definitive deals are imminent, according to sources.

Primary and secondary activity in the Canadian markets was expected to be quiet until after the Oct. 31 fiscal year-end, another bond source said.

"Because of the fiscal year-end, nothing happened today or yesterday," the source said. "Potentially later this week when the markets might be better [there could be new deals] but until then I don't think anyone wants to bring anything because dealer desks are empty."

The markets mostly were quiet with spreads flat to slightly firmer on the day.

The Markit CDX Series 18 North American investment-grade index firmed 2 basis points to a spread of 99 bps from Monday's spread.

The Markit CDX Series 18 North American high-yield index rose to 99.22 from 98.78 on Monday.

Provincial bond spreads closed flat to about a ½ bp wider.

"Volume's very light," a source said.

Canadian government bonds ended higher on weaker domestic data. Statistics Canada said the real gross domestic product fell 0.1% in August, the first monthly decline since February.

Canada's 10-year note yield fell 2 bps to 1.79%. The 30-year bond yield dropped to 2.38% from 2.40%.

Windsor wraps roadshow

Windsor Canada Utilities (/A/) completed a two-day roadshow in Montreal and Toronto on Tuesday, an informed bond source said.

BMO Capital Markets Corp. managed the roadshow.

Windsor, Ont.-based Windsor Canada Utilities provides operations and management services to subsidiary EnWin Utilities Ltd.

Brookfield sells long bonds

Details of a private placement from Brookfield Renewable Kwagis emerged on Wednesday. The company sold C$175 million of senior secured bonds due Dec. 31, 2053 in a private placement in Canada, according to a bond source.

The series 1 bonds (DBRS: A) fully amortize after 10 years.

Scotia Capital Inc. was the bookrunner.

The bonds are guaranteed by subsidiary Kwagis Power LP and secured by all assets of Project Co., which is an entity created to own, develop, construct and operate a 45-megawatt hydroelectric power generating facility in British Columbia.

The holding company, a subsidiary of Brookfield Renewable Energy Partners, plans to use the proceeds to help fund the C$208 million facility project costs.

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