Sun Life Financial, Canada Housing Trust, Province of British Columbia raise C$5.8 billion

By Cristal Cody

Prospect News, Aug. 17 - Canada's corporate and government bond markets saw more activity with deals from Sun Life Financial Inc., Canada Housing Trust and the Province of British Columbia raising a combined C$5.8 billion on Wednesday, bond sources said.

"It has been a busy day," one syndicate source said.

Other deals are possible on Thursday, a bond source said.

"The fact that Sun came out might be a positive," the source said.

Sun Life Financial sold C$300 million 4.57% 10-year senior debentures, while Canada Housing Trust priced C$5 billion in add-ons to two tranches of mortgage bonds on Wednesday.

The Province of British Columbia also tapped the market for C$500 million of 10-year notes.

Canadian government bonds rallied across the curve, along with longer-dated U.S. Treasuries on Wednesday. Canada's 10-year note yield fell to 2.38% from 2.44%. The 30-year bond yield dropped 6 basis points to 3.05%.

In other data, Statistics Canada reported on Wednesday that foreigners divested C$4.5 billion of Canadian bonds in June after investments of C$11.1 billion in May.

"Overall, foreign investors' acquisitions of Canadian bonds in the second quarter matched that of the first quarter," the agency said.

June's activity was dominated by retirements of C$6.4 billion of Canadian government bonds, the agency said. Foreigners acquired C$3.7 billion of Canadian dollar-denominated government bonds on the secondary market.

Canadian investors dropped their holdings of foreign bonds by C$3.2 billion in June, the fourth straight monthly divestment, according to the agency. The reduction focused on U.S. government bonds.

Sun Life raises C$300 million

In the day's lone corporate deal, Sun Life Financial (DBRS: AA) sold C$300 million of 4.57% 10-year senior debentures, series E, at 99.96 to yield 4.575% on Wednesday, according to a company news release and a bond source.

The debentures due Aug. 23, 2021 priced at a spread of 214.9 bps over the Government of Canada benchmark.

RBC Capital Markets Corp., National Bank Financial Inc. and TD Securities Inc. were the managers.

Proceeds will be used for general corporate purposes.

Sun Life Financial is a Toronto-based leading international financial services organization.

Canada Housing Trust prices

Canada Housing Trust (Aaa/AAA/DBRS: AAA) brought the biggest deal of the day and priced C$5 billion in reopenings of two tranches of mortgage bonds on Wednesday, according to a bond source.

The trust sold C$2.5 billion in an add-on to its five-year floating-rate notes due September 2016 at 9.5 bps over the three-month Canadian Dealer Offered Rate. The five-year notes were launched on Tuesday at a minimum size of C$1 billion and talked in the 9 bps area over CDOR.

The trust originally sold the notes on May 18 at three-month CDOR plus 5 bps.

Canada Housing Trust also sold C$2.5 billion in a reopening of its 3.8% notes due June 15, 2021 at 38.5 bps over the Government of Canada benchmark, within guidance, on Wednesday. The deal was upsized from C$2 billion.

The trust originally priced the 10-year notes on Feb. 16 at a spread of 28 bps.

The bonds are guaranteed by the Government of Canada.

RBC Capital Markets, CIBC World Markets Inc., National Bank Financial Inc. and TD Securities were the managers.

Canada Housing Trust is a unit of Canada Mortgage and Housing Corp., which offers financing, mortgage loan insurance and mortgage-backed securities.

British Columbia taps market

In provincial offerings, the Province of British Columbia (Aaa/DBRS: AA) sold C$500 million 3.25% 10-year notes at 99.751 to yield 3.279% on Wednesday, a bond source said.

The bonds due Dec. 18, 2021 priced at a spread of 83 bps over the Government of Canada benchmark.

TD Securities Inc. was the bookrunner.

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