Canadian deal calendar stays thin; Postmedia notes trade higher; Great Canadian Gaming up

By Cristal Cody

Prospect News, Aug. 10 - Canadian bond markets ended quietly on Friday with one new corporate issuance on the week, informed sources said.

"There's very little trade this week, as typical for a Canadian summer week, especially a short week," an investment-grade bond source said. "There's not a lot happening."

The Canadian markets were closed on Monday for a civic holiday. Many desks remain thinly staffed with August considered the typical vacation month, sources said.

Primary activity in the week ahead also appears thin, sources said.

Secondary trading may pick up "if people need to push some cash to work," a source said.

Postmedia Network Inc. brought the only corporate issuance of the week in Canada and priced C$250 million of 8¼% five-year notes, which traded up a point in the secondary market.

The deal saw more than C$400 million of demand from 30 accounts, a syndicate source said.

"It went pretty well," the source said. "A good amount was placed in the U.S."

Corporate bonds overall traded flat on the day, sources said.

The Markit CDX Series 18 North American investment-grade index ended flat for a third day at a spread of 103 basis points.

"Spreads at the end of the week are maybe selectively a little bit better in financials," an investment-grade bond source said. "There's appetite for bank bonds in the secondary market and massive amounts of earnings releases; that's what people seem to be looking at."

The Markit CDX Series 18 North American high-yield index edged up to 98.98 from 97.94.

Great Canadian Gaming Corp.'s 6 5/8% 10-year senior notes continue to trade higher, up 2 points since the notes priced in July, a source said on Friday.

Canadian government bonds ended with gains following weaker Chinese trade growth and a drop in domestic labor data.

Statistics Canada said on Friday that employment dropped by 30,000 in July. The unemployment rate rose 0.1% to 7.3%.

Canada's 10-year note yield fell 3 bps to 1.78%. The 30-year government bond yield closed 2 bps lower at 2.32%.

Postmedia active

In secondary trading, Postmedia Network's 8¼% senior secured first-lien notes due Aug. 16, 2017 rose to 101 bid, 101.5 offered, a trader said on Friday.

"Good two-way flow," the trader said.

Postmedia sold C$250 million of the five-year notes (Ba3/B+/) at par on Thursday.

The company, a subsidiary of Postmedia Network Canada Corp., is a Toronto-based newspaper publisher.

Great Canadian Gaming up

Great Canadian Gaming's 6 5/8% senior notes due 2022 are better and were quoted at 102 bid on Friday, a bond source said.

The company sold C$450 million of the 10-year notes (B1/BB+/) at par on July 18.

The Richmond, B.C.-based gaming, entertainment and hospitality company has operations in Canada and the United States.

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