Canadian markets quiet as U.S. heat ups, TD, Bombardier price; Vermilion flat in trading

By Cristal Cody

Prospect News, March 5 - U.S. bond markets saw much of the pricing action in Canadian debt on Monday as issuers came out in force, including Toronto-Dominion Bank and Bombardier.

In the Canadian markets, Brookfield Asset Management Inc. raised C$250 million in an offering of preferred shares.

Bonds overall were weaker on the day. The Markit CDX Series 17 North American high-grade index eased 1 basis point to a spread of 95 bps.

Bombardier's notes traded lower in the secondary market after pricing, a trader said.

Vermilion Energy Inc.'s bonds were mostly unchanged after the company reported a fourth-quarter loss on Monday, a source said.

Canadian government bonds ended lower on the shorter end of the curve. Canada's 10-year note yield rose 2 bps to 1.97%. The 30-year bond yield was unchanged at 2.58%.

TD Bank sells $3 billion

Toronto-Dominion Bank sold $3 billion of 1.5% five-year covered bonds on Monday to yield mid-swaps plus 45 basis points, or 70.6 bps over Treasuries, a market source said.

The bonds (Aaa/AAA/) were priced in line with guidance, the source said. They were sold under Rule 144A and Regulation S.

Full terms were not available at press time.

Barclays Capital Inc., BNP Paribas Securities Corp., RBC Capital Markets LLC and TD Securities (USA) LLC were the bookrunners.

The bank and financial services company is based in Toronto.

Bombardier sells $500 million

Bombardier sold a $500 million issue of 10-year notes at par to yield 5¾% on Monday, according to a syndicate source.

The yield printed at the tight end of the 5¾% to 6% yield talk.

Citigroup Global Markets Inc., RBC Capital Markets, LLC and UBS Securities LLC were the joint bookrunners for the quick-to-market issue.

The Valcourt, Quebec-based company plans to use the proceeds for general corporate purposes, including paying down its 6¾% notes due 2012.

In the secondary market, the notes traded lower at 99 bid, 99.75 offered, a trader said.

Bombardier is a designer, manufacturer, distributor and marketer of motorized recreational vehicles and powersports engines.

Brookfield sells preferreds

In the domestic market, Brookfield Asset Management said it priced C$250 million of class A preferred shares to yield 4.5% for the initial period through Sept. 30, 2018.

The company sold 10 million shares of the series 32 preferred stock (DBRS: Pfd-2) at C$25.00 per share.

RBC Capital Markets, CIBC World Markets Inc., Scotia Capital Inc. and TD Securities were the bookrunners.

The offering includes a greenshoe of an additional C$50 million, or 2 million shares.

Proceeds will be used to redeem outstanding class A series 10 preference shares for cash on April 5 and for general corporate purposes.

Toronto-based Brookfield Asset Management is a global alternative asset manager with about $150 billion of property, power and infrastructure assets under management.

Vermilion unchanged

In Canada's secondary market, Vermilion Energy's 6½% senior notes due 2016 traded at 105 bid on Monday, a source said.

The notes ((/BB-/DBRS: BB) were seen a week ago at 105.5 bid. Vermilion sold the debt on Feb. 3, 2011 in a C$225 million offering at par.

The company said Monday that it had a fourth-quarter loss of C$30.2 million, or 32 cents a share, compared to a year-ago loss of C$21.8 million, or 25 cents a share.

For fiscal 2011, Vermilion reported a profit of C$142.82 million, or C$1.57 per share, up from C$44.39 million, or 53 cents a share, the previous year.

Vermilion Energy is a Calgary, Alta.-based oil and gas producer.

Andrea Heisinger and Paul A. Harris contributed to this review

© 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.