Trident Resources, Masonite International finish week with deals; high-yield bonds trade up

By Cristal Cody

Prospect News, April 8 - Trident Resources Corp. and Masonite International Corp. both priced their expected deals on Friday in Canadian and U.S.-dollar denominated offerings, informed sources said.

In trading in the high-yield bond markets in Canada and the United States, bonds were active on the day, according to traders.

Paramount Resources Ltd.'s bonds traded up after the company announced plans to buy the remaining stake it does not own in ProspEx Resources Ltd., an informed source said.

Perpetual Energy Inc.'s 8.75% notes due 2018 (B3/B-/) were seen trading Friday "just above 101," one source said.

In other trading, bonds from Catalyst Paper Corp. and OPTI Canada Inc. were active, traders said.

Canadian government bonds edged down on Friday, sending yields up 1 basis point. The 10-year bond yield rose 1 bp to 3.44% and the 30-year bond yield also rose 1 bp to 3.85%.

Statistics Canada said overall employment in March was unchanged. The unemployment rate fell 0.1% to 7.7%.

Masonite upsizes

Masonite International priced an upsized $275 million issue of 10-year senior notes (B3/B+/) at par to yield 8¼% on Friday, according to an informed source.

The yield printed at the tight end of price talk, which had been set in the 8 3/8% area.

Merrill Lynch, Wells Fargo Securities, LLC, Deutsche Bank Securities Inc. and RBC Capital Markets, LLC were the joint bookrunners for the issue, which was upsized from $250 million.

A trader saw Masonite International's new 8¼% notes due 2021 at 102 bid, 102½ offered.

The Mississauga, Ont.-based maker of commercial and residential doors had priced its $275 million offering - upsized from the originally shopped $250 million - earlier at par.

A trader at another desk said the Masonite offering was among "a couple of deals [that] traded up real well," pegging the new bonds above 102.

Masonite, said yet another trader, mostly traded with a 102 handle.

"It sounded like the book was pretty wild, and the underwriter was scrambling to get bonds back in the aftermarket." He said the bonds were going out in a 102-102½ context.

Masonite plans to use the proceeds from the notes sale for general corporate purposes, which may include funding future acquisitions and a return of capital to shareholders.

Trident sells C$175 million

Trident Resources priced C$175 million in 8¼% senior notes due April 13, 2018 at par on Friday, an informed source said.

The notes (/B/) priced at a spread of 507.6 basis points over the Government of Canada benchmark. The notes were talked to yield 7% to 8%.

CIBC World Markets Inc. was the bookrunner.

Proceeds will be used to pay down outstanding debt.

Trident Resources is a Calgary, Alta.-based natural gas exploration company with operations in Alberta and British Columbia.

Paramount stronger

Paramount Resources' bonds were stronger on the news the company will acquire ProspEx Resources, according to an informed source. The deal is valued at C$180 million and includes C40 million of debt.

The company's 8¼% notes due 2017 traded Friday at 104 bid, 105 offered. The notes priced in January at 103 in an add-on of C$70 million.

Calgary, Alta.-based Paramount Resources is an oil and natural gas exploration, development and production company.

Perpetual Energy active

Perpetual Energy's notes due 2018 were quoted at 101.25 bid, 102.25 offered, an informed source said.

The Calgary, Alta.-based oil and gas company priced the debt at par on March 10.

Catalyst sees good showing

A trader said that Catalyst Paper's bonds "moved up on the day," seeing the Richmond, B.C.-based paper manufacturer's 7 3/8% notes due 2014 around 74 bid, which he said was up about 3 points on "decent volume," although he was unaware of any news that might explain investors' interest in those bonds.

"So that had a good showing today."

A second trader said he was "not sure why Catalyst popped up, but they seemed to gap up and down" on the 7 3/8s.

"They traded down earlier in the week, and now they're back up." He suggested that after the bonds initially dropped on investors' anticipation that there might be bad news coming about the company, they went back up as people wanted to buy bonds on the cheap since there is ample cash to be put to work in the market. He saw the bonds ending the day at 74 bid.

A market source said that more than $13 million of the bonds traded in round-lot transactions, making Catalyst one of the most active purely junk issues - on other words, not a "five-B" type crossover credit. While the bonds initially eased slightly from Thursday's closing level around 71 bid, by the day's end, the source saw them trading back up in a 73-74 context, calling it a 3 point gain.

OPTI Canada rises

A trader said that OPTI Canada's bonds were "active, still up there among the [volume] leaders and probably trading near their [recent] highs," estimating the Calgary, Alta.-based oil-sands energy producer's 7 7/8% and 8¼% notes due 2014 trading "closer to 55" bid, after having begun the week trading around 53.

"Market strength is what it is," he said - the generally buoyant tone in the overall junk secondary market, rather than any specific positive about the troubled energy company, "nothing specific to the credit, that I can tell."

Paul Deckelman and Paul A. Harris contributed to this report

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