Rogers Communications sells 10-year notes to yield 4.707%; bonds rally; Canada exchanges debt

By Cristal Cody

Tupelo, Miss., Sept. 22 - In the Canadian corporate bond market on Wednesday, Rogers Communications Inc. sold C$900 million in 4.7% 10-year senior notes (DBRS: BBB) at a spread of 185.2 bps over the Canadian government benchmark bond, according to sources.

The notes were sold at C$999.45 per C$1,000 principal amount for a yield of 4.707% per year. The notes are due Sept. 29, 2020.

Bank of Nova Scotia and Toronto-Dominion Bank were the bookrunners. The notes were offered in Canadian provinces only.

Closing is expected on Sept. 29.

Proceeds will be used to repay outstanding advances under the company's bank credit facility and for general corporate purposes.

The Toronto-based company provides wireless voice and data communications, cable television, internet and telephone services in Canada.

CHC Helicopter prices

In other deals, CHC Helicopter SA priced a $1.1 billion issue of 9¼% 10-year senior secured notes (B1/B+) at 98.399 to yield 9½% on Wednesday, according to an informed source.

The yield printed at the wide end of the 9¼% to 9½% price talk.

Morgan Stanley, HSBC, RBC Capital Markets and UBS Investment Bank were the joint bookrunners.

Proceeds will be used to repay all outstanding debt under the company's existing senior credit facilities and to pay breakage fees on interest-rate swaps.

The issuer is a commercial helicopter operator based in St. John's, Newfoundland.

Bonds rally on Fed, China

Elsewhere in Canada, government bonds rallied along with U.S. Treasuries in reaction to the U.S. Federal Reserve's announcement the previous day of the potential for more steps to boost the economy.

The Canadian benchmark two-year note yield fell to 1.417% from 1.444%.

Canada's 10-year note yielded 2.864%, down from 2.905%.

U.S. Treasury yields also fell on the bond rally. The 10-year note yield fell 1 basis point to 2.56%. The yield on the two-year note rose 2 bps to 0.43%.

The Federal Open Market Committee said in its statement Tuesday that it is prepared to take additional quantitative easing steps in addition to the Treasury purchases already underway to stimulate the economy.

"The rally in Treasuries is tied to the potential of quantitative easing," one source said.

In addition, bonds for a second day were reacting to inflation data from China and the appreciation of the Chinese currency over the past three weeks, sources said.

"We suspect China is buying commodities, which could explain the rise in metals, including gold," a source said. "It is probably buying European, Japanese and other currencies to keep the CNY [yuan] competitive."

Canadian economic data released Wednesday included a report from Statistics Canada that retail sales slipped 0.1% in July to C$35.9 billion.

Nova Scotia posted the largest decline of 5.3%, while Manitoba saw the largest growth in sales at 1.6%, according to the agency.

"Increased sales in seven provinces were offset by declines in the other three," Statistics Canada said.

In other data, the agency's index of leading indicators rose 0.5% in August on Canadian manufacturing gains.

Canada completes exchange

Also on Wednesday, the Government of Canada said that it completed the exchange of marketable bonds in a bond switch operation.

Canada repurchased C$645 million in bonds due 2014 through 2016.

The government replaced them with C$469.21 million in 3% bonds due Dec. 1, 2015 at a price of 104.242.

Paul A. Harris contributed to this report

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