Ford Credit sells bonds; Ontario, Quebec tap markets; guidance out on Plenary Health deal

By Cristal Cody

Prospect News, Sept. 14 - Ford Credit Canada Ltd. sold more than C$500 million of asset-backed notes through the Ford Auto Securitization Trust late Wednesday, according to syndicate sources.

Final pricing details were not available by press time.

Primary activity by Canada's provincial issuers also was busier on Wednesday with two deals in the domestic and U.S. bond markets.

The Province of Ontario sold $2 billion of 1.6% five-year bonds in the U.S. high-grade market on Wednesday, while the Province of Quebec raised C$500 million in an add-on to its long bonds.

In other activity, spread guidance emerged on Plenary Health Care Partnerships Humber LP's upcoming sale of than C$1 billion of bonds (/A/DBRS: A), a source said Wednesday.

The bonds are expected to price before Tuesday.

"Construction on the hospital starts Sept. 23. [I] think they have until then to get it priced," a source said. "If market tone is there and investor feedback comes back positive, they'll price as soon as they can."

The markets were improving on Wednesday with positive overseas developments but remain volatile, sources said.

Canada's corporate markets are "behaving better today," a syndicate source said. "It's still a volatile market. The market wants to be prepared for when our windows open for liquidity."

No high-grade or high-yield bond deals are immediately in the works.

"The market is a little bit skittish to say the least," one source said. "Some of that trust securities stuff can get done because of the spread, but real credit, there's a risk aversion out there."

In trading, bond spreads were a "little bit tighter," a source said. "Every credit has its own story, but generically it's about 3 basis points better, primarily led by financials."

Another bond source saw the market ending better but on light trading.

"Spreads are probably 5 to 10 basis points better, but there's hasn't been any real volume," the source said. "Bank deposit notes are between 5 to 10 basis points tighter than they were yesterday."

Toronto-Dominion Bank's notes traded about 9 bps stronger in the secondary market.

Provincial bond spreads were "tighter on the day by about half a basis point," another source said.

Government bonds made slight gains on the short end of the curve. The 10-year note yield fell 3 bps to 2.19%. Canada's 30-year bond yield ended unchanged at 2.85%.

Ford Credit ABS price

Ford Credit Canada priced more than C$534.61 million of asset-backed notes through the Ford Auto Securitization Trust late in the afternoon, according to sources.

Final pricing details were not immediately available.

The offering included C$172 million of series 2011R2 class A1 notes (DBRS: AAA) due Aug. 15, 2013; C$206 million of series 2011R3 class A2 notes (DBRS: AAA) due July 5, 2015; C$119.93 million of series 2011R2 class A3 notes (DBRS: AAA) due Nov. 15, 2016; C$15.72 million of series 2011R3 class B notes (DBRS: AA) notes due March 15, 2017; C$10.48 million of series 2011R3 class C notes (DBRS: A) due June 15, 2017 and C$10.48 million of series 2011R3 class D notes (DBRS: BBB) due March 15, 2018.

CIBC World Markets Inc., HSBC Securities (Canada) Inc., RBC Capital Markets Corp., BMO Capital Markets Corp. and TD Securities Inc. were the managers.

Ford Motor Co. is the performance guarantor.

Proceeds will be used to finance the purchase of retail conditional sale contracts secured by new and used vehicles.

The issuer is the Canadian finance arm of the Ford Motor Co.

Quebec prices C$500 million

The Province of Quebec (Aa2/A+/A) raised C$500 million in an add-on to its 4.25% bonds due Dec. 1, 2043 at 106.746 to yield 3.88% on Wednesday, a bond source said.

The bonds priced at a spread of 102 bps over the Government of Canada benchmark.

National Bank Financial Inc. was the lead manager.

The province first brought the issue on Aug. 12 in a C$500 million offering priced at 103.875 to yield 4.034%, or a spread of 97 bps over the benchmark. The bonds were reopened on Sept. 1 in a C$500 million deal priced at 103.467 to yield 4.056%, or 100 bps over the benchmark.

The total outstanding is now C$1.5 billion.

Ontario prices $2 billion

The Province of Ontario sold $2 billion of 1.6% five-year bonds on Wednesday to yield Treasuries plus 75.35 bps, or mid-swaps plus 44 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes (Aa1/AA-) were priced at 99.88 to yield 1.625%. They are non-callable.

Bookrunners were Bank of America Merrill Lynch, Barclays Capital Inc., Goldman Sachs & Co. and RBC Capital Markets LLC.

Co-managers were National Bank Financial Inc., BMO Capital Markets Corp., CIBC World Markets Corp., Scotia Capital USA Inc. and TD Securities USA LLC.

The issuer is based in Toronto.

Pricing ahead on Plenary deal

Guidance emerged on Plenary Health Care Partnerships Humber's upcoming sale of than C$1 billion of bonds (/A/DBRS: A), a source said Wednesday.

The deal includes C$482.089 million of short-term senior bonds due Aug. 14, 2016 with spread guidance of 135 bps to 140 bps.

The second tranche of C$373.473 million of series A long-term senior bonds due May 31, 2039 has guidance of 210 bps to 215 bps.

The last tranche of C$149.01 million of series B long-term senior bonds due Nov. 30, 2044 is expected in the 230 bps to 240 bps area.

Marketing continued Wednesday on the deal and pricing is expected between Friday and Tuesday, the source said.

RBC Capital Markets Corp. is the lead manager.

Plenary Health Care Partnerships is an entity created to design, build, finance and maintain a new 1.7 million square foot hospital in Toronto.

Toronto-Dominion Bank firms

In Canada's secondary market, the 2.948% five-year deposit notes that Toronto-Dominion Bank (Aaa/AA-/DBRS: AA) priced during the summer traded stronger with the rest of the financial sector on Wednesday, a source said.

The notes due Aug. 2, 2016 were quoted going out on Tuesday at 116 bps and trading "closer to 107 today," the source said.

The bank sold C$1.75 billion of the notes at on July 27 at 83 bps over the Canadian bond curve.

The bank and financial services company is based in Toronto.

Nortel Networks busy

Bankrupt Montreal-based telecommunications technology company Nortel Networks Corp.'s bonds were the busiest in the junk space on Wednesday, with more than $55 million of its 10¾% notes due 2016 having changed hands.

A trader saw the notes finishing at 107¾ bid, 108¾ offered, down more than a point on the day after having begun the session at 109 to 110.

A second trader saw "a lot of activity, a ton of trading" in the credit, pegging the bonds in the 108-109 range all day.

The company's 10 1/8% notes due 2013 were also fairly busy, with more than $23 million traded. He said that these two were down 1 point at 108 bid, 108½ offered.

There was no fresh news out on the company - currently in the process of selling off its assets, such as its recently auctioned patent portfolio, in order to liquidate.

Andrea Heisinger and Paul Deckelman contributed to this review

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