MetLife Global sells floaters; Sydney Airport on roadshow; American Express Canada widens

By Cristal Cody

Prospect News, June 8 - Metropolitan Life Global Funding I sold C$325 million of three-year floating-rate notes (Aa3/AA) at par on Wednesday, according to a syndicate source.

"In spite of what has to be considered a rather weak market, it was a very successful deal," the source said.

The deal was the only one reported on Wednesday.

"The markets are weak globally," the source said, noting a continuation of negative sentiment after last week's weak non-farm payrolls data in the United States. "We are pretty happy to get that deal in the market."

In the potential deal pipeline, Sydney Airport Finance Co. Pty Ltd. of Australia is on a roadshow for a Maple bond offering in Canada, according to a source on Wednesday.

"That's the only other one on the radar," a source said.

In the secondary market, the new deal brought the previous week from American Express Canada Credit Corp. widened, a source said.

"It's a little wider, reflecting the widening we've seen in the U.S. as well," the source said.

In even more distressed credits, OPTI Canada Inc.'s subordinated issues took a hit, falling about 2 points or more on the day. However, there was no news out to cause the decline.

Sino-Forest Corp. meantime managed to regain a bit of ground, though a trader did note that activity in the name was starting to wane.

In other bond news, ratings agency DBRS released its April tally of the asset-backed securities market in Canada for April. The total outstanding amount in the Canadian ABS market was C$32.1 billion, up 6.1% from the previous month's outstanding amount of C$30.2 billion.

"The ABS market has seen several large issuances from credit card programs over the course of the year, in particular from CARDS II Trust, Master Credit Card Trust and Golden Credit Card Trust in an aggregate amount of $4.2 billion," DBRS said in the report. "Although some of the issuance was used to refinance scheduled maturities, the majority was used to finance portfolio growth. DBRS expects this segment to continue to be active throughout the rest of the year."

Credit cards remained the dominant asset class, with a 64.8% share, up from 60.3% in March. Auto loans and auto leases fell to 16.0% from 17.6% the previous month, followed by floorplan financing, which fell to 7.7% from 9.2% in March.

Canada's government bonds on Wednesday ended higher, tracking U.S. Treasuries. The 10-year bond yield fell 3 basis points to 3.00%. The 30-year bond yield fell to 3.49% from 3.52%.

MetLife sells C$325 million

Metropolitan Life Global Funding I sold C$325 million of three-year floating-rate notes (Aa3/AA) at par on Wednesday to yield 90 bps over the three-month CDOR, a source close to the sale said.

TD Securities, CIBC World Markets Inc. and Scotia Capital Inc. were the lead managers.

The company is the funding arm of U.S.-based insurance company Metropolitan Life Insurance Co.

Sydney Airport on roadshow

Sydney Airport in Australia is on a roadshow for a Maple bond offering in Canada, according to a source on Wednesday.

Scotia Capital Inc. and Bank of America Merrill Lynch are the bookrunners.

The airport is Australia's largest and is owned by infrastructure fund Macquarie Airports.

American Express weaker

American Express Canada Credit priced C$725 million of bonds in three-year floating-rate notes and five-year fixed-rate notes on June 1.

In trading, the fixed-rated notes due June 3, 2016 widened to 142 bps bid, according to a bond source. American Express Canada sold C$400 million of the 3.6% five-year notes at a spread of 135 bps over Government of Canada June 2016 benchmark securities.

"American Express bonds are moving a bit with U.S. bonds, credit's weaker," the source said.

American Express Canada is a division of the New York-based credit card company American Express Co.

OPTI takes a hit

OPTI Canada's subordinated paper "got beat up pretty good," according to a trader.

He quoted the 7 7/8% and 8¼% notes due 2014 at 42 bid, 43 offered on Wednesday.

Another trader called the 7 7/8% notes down 2½ points to 43.

There was no news out on the Calgary, Alta.-based oil-sands producer that would have caused declines in the debt. However, CIBC Markets Inc. analyst Andrew Potter reportedly urged investors to avoid the company's stock, given uncertainty surrounding the company's strategic alternatives review. Potter opined that OPTI could elect to do a debt-for-equity swap that would value the stock at as little as 30 cents.

The stock (Toronto: OPC) slipped a cent to C$0.17.

Sino recoups some losses

A trader said that trading volume in Sino-Forest was weakening, even as the bonds regained a couple of points.

"It has been all over the place," the trader said. "It seemed like there was definitely a slow-down in volume in those."

He saw the 10¼% notes due 2014 trading around "64-ish," up from the low-60s previously.

Another trader said the 10¼% notes were the most active Sino issue, seeing the bonds gain more than 2 points to close around 641/4.

The Hong Kong- and Ontario-based tree farming company said Wednesday that the Ontario Securities Commission has opened an investigation into the trading activities of the company's stock in the wake of a controversial research report published by Muddy Waters Research.

Sino has also requested that the Toronto Stock Exchange and the Investment Industry Regulatory Organization of Canada investigate the trading of the company's shares by Muddy Waters, LLC and its principal Carson Block and anyone associated with these persons in advance of the issuance of the report.

It will also request an investigation by the Singapore Exchange Ltd. in respect to the trading of the company's bonds.

Late last week, Muddy Waters issued a report alleging that the company's statements regarding its land holdings in China did not match Chinese city records and that its stated production figures may be inaccurate. Sino has refuted the claims, going so far as to post supporting documentation on its website.

On Tuesday, Moody's Investors Service said it was considering cutting its rating on the company.

Stephanie N. Rotondo 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.