Aeroports de Montreal sells C$250 million 30-year revenue bonds; Sherritt, Postmedia rise

By Cristal Cody

Prospect News, Sept. 21 - Aeroports de Montreal priced a C$250 million 30-year revenue bond offering on Friday, following a C$400 million 10-year deal earlier in the week from the Greater Toronto Airports Authority.

Otherwise, the day was "very quiet," a high-grade bond source said.

Canadian high-yield bonds continue to have a bid, another bond source said.

Sherritt International Corp.'s C$500 million high-yield offering of eight-year senior debentures priced on Wednesday saw a record amount of buyers, and the bonds continue to trade up 2 points.

Sherritt's other outstanding paper also traded stronger, a market source said.

Also in the secondary market, Postmedia Network Inc.'s 8¼% notes due Aug. 16, 2017 sold in August traded about ½ a point higher from the start of the week, a bond source said.

Ford Credit Canada Ltd.'s bonds are trading up on a spread basis since DBRS upgraded the credit to investment grade a week ago, a source said on Friday.

DBRS upgraded Ford Motor Co. and financing arm Ford Credit Canada to BBB (low) from BB (high).

Government bonds ended mostly flat. The yield on the Canadian 10-year note fell 1 basis point to 1.85%. The 30-year bond yield closed unchanged at 2.42%.

In economic data, Canadian consumer prices rose 1.2% in August, compared to a 1.3% increase in July, Statistics Canada said on Friday.

Wholesale sales fell 0.6% to C$49.5 billion in July, following a 0.3% drop in June, the agency said in a separate report.

Aeroports de Montreal prices

In the day's primary activity, Aeroports de Montreal (A1//DBRS: A) sold C$250 million of 30-year revenue bonds at par to yield 3.919%, or a spread of 150 bps over the Government of Canada benchmark, an informed bond source said.

The series K bonds due Sept. 26, 2042 priced in the Canadian private placement market.

CIBC World Markets Inc. and RBC Capital Markets Corp. were the bookrunners. Co-managers were Desjardins Securities Inc., HSBC Capital (Canada) Inc., National Bank Financial Inc. and Casgrain & Co. Ltd.

The notes are redeemable at the Canada bond yield plus 37.5 bps.

Aeroports de Montreal operates the Montreal-Pierre Elliott Trudeau and the Montreal-Mirabel international airports.

Sherritt holds higher

Canadian high-yield secondary bond activity included Sherritt's 7½% senior debentures due Sept. 24, 2020 trading on Friday at 102 bid, 102.375 offered, a trader said.

The company sold an upsized C$500 million of the debentures (DBRS: Provisional BB) at par on Wednesday.

Sherritt's other bonds traded stronger, a market source said.

The company's 8¼% notes due 2014 rose more than 5 points on the week, going out on Friday at 112.25 bid. Sherritt sold C$225 million of the two-year notes on Oct. 18, 2007 at par.

Toronto-based Sherritt produces coal, oil, gas and power and mines and refines nickel.

Postmedia rises

Postmedia Network's 8¼% senior secured first-lien notes due Aug. 16, 2017 traded up to 101.5 bid on Friday, up ½ a point on the week, a bond source said.

The company sold C$250 million of the five-year notes (Ba3/B+/) at par on Aug. 9.

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

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