Plenary Health, PSP Capital sell bonds; Paramount Resources finds demand across border

By Cristal Cody

Prospect News, Nov. 30 - Issuers including Plenary Health Hamilton LP, PSP Capital Inc. and Paramount Resources Ltd. wrapped sales of bonds on Tuesday in the Canadian high-grade and high-yield markets, sources said.

In new high-yield debt, Paramount Resources sold an upsized C$300 million of 8.25% series 2 senior unsecured notes due Dec. 13, 2017 at par on Tuesday, sources said.

The notes (Caa2/B+/) priced at a spread of 562 basis points over the Government of Canada benchmark bond. The notes were upsized from C$250 million and talked at an 8.25% area yield.

The "transaction went very well," an informed source said. The book was "well in excess of $450 million" on a "good deal of demand in the U.S."

The debt was offered in the United States under Rule 144A and had 39 buyers. About 10% were estimated to be U.S. investors, a source said.

Scotia Capital Inc. and BMO Nesbitt Burns Inc. were the bookrunners.

Proceeds will be used to redeem the 8.5% senior notes due Jan. 1, 2013, to repay debt under the company's senior revolving credit facility and for general corporate purposes.

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

Elsewhere, Canadian government bonds rallied on flight-to-safety trading from Eurozone debt problems and weaker economic data. The yield on the 10-year Canadian bond fell to 3.061% from 3.06%. The two-year note yield ended at 1.615% from 1.65%.

Statistics Canada said the real gross domestic product rose 0.3% in the third quarter compared to 0.6% in the second quarter. Analysts had expected a 1.5% gain in the quarter.

PSP Capital upsizes

In the investment-grade market in Canada, PSP Capital, a subsidiary of the Public Sector Pension Investment Board, sold C$700 million of 2.94% series 2 medium-term notes due Dec. 3, 2015 at 99.958 to yield 2.949% on Tuesday, according to a source.

The notes (DBRS: AAA) priced at a spread of 62.1 bps over the Government of Canada benchmark, slightly tighter than original guidance of 64 bps. The sale was upsized from C$500 million.

TD Securities Inc. and RBC Capital Markets Corp. were the bookrunners.

The notes are guaranteed by the Public Sector Pension Investment Board.

Proceeds will be used to repay short-term debt.

PSP Capital was created to raise financing for investment activities through short-term and long-term borrowing. Ottawa-based Public Sector Pension Investment Board is a crown corporation that manages the pension plans from the Canadian federal public service, Canadian Forces and Royal Canadian Mounted Police.

Plenary Health prices

Early on Tuesday, Plenary Health Hamilton sold C$370.179 million in a two-tranche deal, an informed source said.

The two-part offering was downsized from C$373.6 million announced on Monday.

Plenary Health sold C$115.425 million of 3.157% notes due Dec. 13, 2013 at par, or a spread of 141.2 bps over the Government of Canada benchmark bond.

Guidance on the short debt was C$115.3 million of notes at a spread of 130 bps over the Canadian benchmark bond.

The second tranche of C$254.754 million of 5.796% amortizing notes due May 31, 2043 priced at par, or a spread of 225 bps over the Canadian benchmark bond. The notes have an average life of 22.36 years.

The amortizing notes were talked at C$258.3 million at a spread of 225 bps over the Canadian benchmark.

RBC Capital Markets Corp. was the bookrunner.

Plenary Health Hamilton is a new 830,000 square foot mental health care facility under construction by St. Joseph's Healthcare Hamilton in Hamilton, Ont.

© 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.