Canadian Western Bank sells three-year notes; three deals on primary calendar for week

By Cristal Cody

Prospect News, Oct. 31 - Canadian Western Bank Group raised C$150 million in a short-dated deal on Monday, starting what is expected to be a busy deal week, according to bond sources.

Details emerged on Monday for CNH Capital Canada Receivables Trust's C$351.03 million offering of asset-backed notes.

"Pricing should be this week, toward the later part," one source said.

Two more bond deals are expected to price in Canada's high-yield market.

Cara Operations Ltd. plans to sell C$75 million in senior second-lien guaranteed notes, while GreenField Ethanol Inc. will wrap its two-week roadshow on Wednesday for an offering of C$175 million offering of five-year senior second-lien notes (/B+/DBRS: B).

The long lull in new Canadian high-yield deals was broken on Friday after Sherritt International Corp. sold C$400 million in seven-year senior notes.

Government bonds were stronger on Monday. Canada's two-year note yield fell to 0.99% from 1.08%. The 10-year note yield dropped 10 basis points to 2.28%. The 30-year bond yield slipped to 2.92% from 3.02%.

"We had reasonably firm data this morning in the form of a gain in GDP for August of 0.3%, but all the movement today was following the back of equities following the back of the U.S. Treasury market," a bond source said.

"Ultimately, it led to quite a rally in Canada. We managed to keep pace with U.S. rates in the belly of the curve, where we saw five-year rates down 13 basis points, but at the long end, we underperformed. Longer-term yields in Canada are down 13 basis points versus 24 for U.S. long bonds," the source said.

Statistics Canada said the real gross domestic product rose 0.3% in August, following an increase of 0.4% in July.

Key economic data for the week includes job reports for Canada and the United States on Friday.

Canadian Western Bank prices

In the market on Monday, Canadian Western Bank Group (DBRS: A) priced C$150 million in 2.57% three-year senior deposit notes at par, a bond source said.

The notes due Nov. 4, 2014 priced at a spread of 133 bps to the Canadian bond curve.

The deal was launched early Monday at a spread of 135 bps over the curve, plus or minus 2 bps.

RBC Capital Markets Corp. and National Bank Financial Inc. were the lead managers.

Canadian Western Bank was in the market nearly a year ago with a deal of C$300 million of 4.389% fixed-floating subordinated notes due Nov. 30, 2015 (DBRS: BBB), which priced at par on Nov. 23, 2010.

The Edmonton, Alta.-based publicly traded bank offers business and personal banking across western Canada.

CNH Capital Canada to sell C$351 million

CNH Capital Canada Receivables Trust is expected to price C$351.03 million of series 2011-1 receivable-backed notes in three tranches late in the week, a bond source said Monday.

The deal includes C$161 million of class A1 notes (Aaa//DBRS: AAA) with a weighted average life of 6.1 years and C$181.6 million of class A2 notes (Aaa//DBRS: AAA) with a weighted average life of 2.35 years. The third tranche of class B notes (A1//DBRS: A) is sized at C$8.43 million and has a weighted average life of 3.77 years.

A roadshow for an offering of agricultural equipment loan asset-backed securities was held the week of Oct. 10.

BMO Capital Markets Corp. and RBC Capital Markets Corp. are the lead managers.

Proceeds will be used to acquire title and interest in a pool of receivables originated by CNH Capital Canada Ltd., a unit of CNH Global NV, an Amsterdam-based agricultural and construction equipment manufacturer and a subsidiary of Fiat Industrial SpA.

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