Perpetual Energy, WTH Car Rental, Precision Drilling price; Canadian Satellite sets size

By Cristal Cody

Prospect News, March 10 - Perpetual Energy Inc. and WTH Car Rental ULC both wrapped deals in the Canadian and U.S. bond markets on Thursday.

Late in the day, Precision Drilling Corp. sold its first high-yield offering - C$200 million of senior notes due 2019 - in Canada.

Also in the market, Husky Energy Inc. priced C$250 million of five-year cumulative rate reset first preferred shares, according to a 6-K filing with the U.S. Securities and Exchange Commission.

Coming up in high-yield deals, Canadian Satellite Radio Holdings Inc., parent of XM Canada, said Thursday it will sell C$70 million of 9.75% high-yield senior notes due 2018.

Government bonds rallied on softer trade data and the flight-to-quality bid on Middle East concerns. Canada's five-year note fell 9 basis points to 2.57%, while the 10-year bond yield dropped 8 bps to 3.27%. The 30-year bond yield fell 5 bps to 3.74%.

Statistics Canada said Canada's trade surplus narrowed to C$116 million in January from C$1.7 billion in December.

Softer U.S. economic data also helped bonds. Initial weekly jobless claims rose 20,000 to 397,000 in the previous week, the Labor Department said.

U.S. trade balance in January was 15% wider at $46.6 billion, the Commerce Department said.

In addition, data that Chinese and German exports fell, along with Moody's Investors Service's downgrade of Spain to Aa2, led to the bond rally, sources said.

Perpetual Energy brings deal

Perpetual Energy sold its previously announced offering of C$150 million 8.75% senior notes due March 15, 2018 (B3/B-/) on Thursday at par, a source said.

The notes priced at a spread of 574.2 bps over the Government of Canada benchmark.

The deal was offered in Canada and the United States.

Standard & Poor's had said in its ratings notice that if the deal was upsized, it would lower the rating to CCC+.

BMO Capital Markets Corp. was the lead manager.

Proceeds will be used to repay existing debt under the company's existing credit facility and provide flexibility with the maturity of its 6.5% convertible debentures due June 2012.

The oil and gas company is based in Calgary, Alta.

Precision Drilling prices

Precision Drilling said late Thursday it sold C$200 million 6.5% senior notes due 2019 (Ba2/BB+/) in Canada.

RBC Capital Markets Corp., Credit Suisse and TD Securities Inc. were the lead managers.

Additional pricing details were not immediately available.

The proceeds along with available cash will be used to repay outstanding debt under the company's senior secured revolver.

Precision is a Calgary, Alta.-based equipment and services provider for the oil and gas industry.

WTH Car Rental sells ABS

WTH Car Rental, a unit of rental car supplier Avis Budget Group Inc., priced C$200 million of fixed-rate asset-backed notes due Sept. 21, 2015 at par to yield 4.179% on Thursday, a source said.

The notes carry a monthly coupon of 4.143% and priced with a spread of 177.2 bps over the Government of Canada benchmark.

Scotia Capital Inc. and BMO Capital Markets Corp. were lead managers.

Husky Energy sells preferreds

Husky Energy priced C$250 million of five-year cumulative rate reset first preferred shares, according to a 6-K filing with the SEC.

The offering included 10 million preferred shares, series 1, at C$25.00 per share.

The preferreds yield a 4.45% annual dividend for the period ending March 31, 2016. Thereafter, the dividend rate will be reset every five years at a rate equal to the five-year Government of Canada bond yield plus 173 bps.

CIBC World Markets Inc., RBC Capital Markets Corp. and BMO Capital Markets Corp. were the lead managers.

The deal includes an over-allotment option of 2 million shares.

Proceeds will be used for repayment of existing debt, for capital expenditures, for corporate and asset acquisitions and for general corporate purposes.

Husky Energy is an integrated energy company based in Calgary, Alta.

Canadian Satellite on tap

Canadian Satellite Radio Holdings, parent of XM Canada, said Thursday it will sell C$70 million 9.75% senior notes due 2018 in Canada and the United States.

The deal had been expected to be sized at C$130 million to C$150 million.

National Bank Financial Inc. is the bookrunner, and Canaccord Genuity Corp. is a co-lead manager.

The proceeds will be used to help complete the all-stock merger with Sirius Canada Inc. and fund the cash payments under the exchange offer of $69.8 million outstanding 12.75% senior notes due 2014, to repay outstanding debt and for general corporate purposes.

The bond offering is expected to close in May or June, on the same date as the closing of the merger.

OPTI Canada down

A market source said that OPTI Canada Inc.'s 8¼% notes due 2014 were down a deuce on Thursday to finish at 53 bid.

A Canadian newspaper meantime quoted the president and chief executive officer of OPTI Canada's partner in its pilot Long Lake, Alta., oil-shale plant, Nexen Inc., as having said that his company sees no need to buy out OPTI Canada's 35% stake in that project. The troubled Calgary, Alta.-based OPTI has recently been exploring the possibility of selling assets, or even the whole company, but has so far not found any potential buyers.

The Edmonton Journal quoted Nexen boss Marvin F. Romanow as having declared during an interview "there's no driving necessity for us to own all of it," adding that his company has a "healthy working interest at 65%."

Paul Deckelman contributed to this review

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