Ford Credit Canada, Methanex price; Canada Housing sets talk; Methanex, Scotiabank firm

By Cristal Cody

Prospect News, Dec. 12 - Canadian deal action on Wednesday centered on a C$750 million private placement offering of five-year senior notes from Ford Credit Canada Ltd. as the market prepares for new issuance the remainder of the week, bond sources said.

Canada Housing Trust launched a C$5 billion offering of its existing 1.7% mortgage bonds due Dec. 17, 2017 on Wednesday with pricing set for Thursday.

Also on Thursday, Inmet Mining Corp. is expected to sell a $500 million offering of 8.5-year senior notes, according to an informed source.

In the U.S. market on Wednesday, Methanex Corp. sold an upsized $350 million of 3.25% seven-year split-rated senior notes, with the notes trading 10 basis points better in the secondary market, bond sources said.

In other trading, the Bank of Nova Scotia's 1.375% senior notes due 2017 priced the previous day tightened 5 bps.

Trilogy Energy Corp.'s 7¼% senior notes due 2019 sold a week ago traded higher on the day, a trader said.

Connacher Oil & Gas Ltd.'s high-yield bonds are down 2 to 3 points in light trading, a source said. The company has 8¾% senior notes due 2018 sold in Canadian dollars and 8½% senior notes due 2019 priced in U.S. dollars outstanding.

"The U.S. dollar bonds are more active than the Canada ones," the source said.

The secondary market saw some activity over the day with "a little bit of two-way flow," a trader said.

The Markit CDX Series 18 North American investment-grade index firmed 1 bp to a spread of 93 bps.

The Markit CDX Series 18 North American high-yield index edged down to 101.32 from 101.33.

Canadian government bonds traded lower in line with U.S. Treasuries following the Federal Reserve's policy rate decision. Canada's 10-year note yield closed 3 bps higher at 1.76%. The 30-year bond yield rose to 2.37% from 2.34%.

Ford Credit Canada prices

Ford Credit Canada sold C$750 million of 3.32% five-year senior notes at 99.959 to yield 3.329% in a private placement on Wednesday, according to an informed bond source.

The notes due Dec. 19, 2017 (Baa3/BB+/DBRS: BBB) priced at a spread of 200 bps over the interpolated Government of Canada bond curve.

CIBC World Markets Inc. and RBC Capital Markets were the bookrunners. Co-managers were BMO Capital Markets Corp., Scotia Capital Inc. and TD Securities Inc.

The issue is guaranteed by Ford Motor Credit Co. LLC.

Ford Credit Canada is the Canadian financing arm of Ford Motor Co.

Methanex sells $350 million

Methanex priced an upsized $350 million of 3.25% seven-year split-rated senior notes on Wednesday to yield Treasuries plus 230 bps, a market source said.

The size of the sale was increased from $300 million. Pricing was at the low end of price guidance in the 235 bps area.

The notes (Ba1/BBB-/BBB-) were sold at 99.098 to yield 3.396%.

There is a make-whole call at 35 bps over Treasuries and a change-of-control put feature at 101%.

J.P. Morgan Securities LLC and RBC Capital Markets LLC were the active bookrunners. Passive bookrunners were BNP Paribas Securities Corp. and RBS Securities Inc.

Co-managers were HSBC Securities (USA) LLC and nabSecurities LLC.

Proceeds will be used for capital expenditures and any one or more debt repayments, for working capital and other general corporate purposes.

In secondary trading, the notes firmed to 220 bps bid, 210 bps offered, a trader said.

The worldwide methanol supplier is based in Vancouver, B.C.

Canada Housing on tap

Canada Housing Trust (Aaa/AAA/DBRS: AAA) is expected to price its offering of Canada Mortgage Bonds on Thursday after it launched a C$5 billion offering of existing 1.7% mortgage bonds due Dec. 17, 2017.

The bonds are talked to price in the area of 35 bps over the Government of Canada benchmark, an informed source said.

The trust sold C$5 billion of the Canada mortgage bonds on Sept. 19 at 99.777 to yield 1.745%, or a spread of 34 bps over the Government of Canada benchmark.

The trust is a unit of Canada Mortgage and Housing Corp., which provides financing, mortgage loan insurance, mortgage-backed securities and housing policy and programs.

Inmet to price $500 million

Inmet Mining plans to price a $500 million offering of 8.5-year senior notes on Thursday, according to an informed source.

Joint bookrunner Credit Suisse Securities (USA) LLC will bill and deliver. J.P. Morgan Securities LLC is also a joint bookrunner.

The Rule 144A and Regulation S for life notes come with four years of call protection and feature a three-year 35% equity clawback and a 101% poison put.

The Toronto-based copper and zinc mining company plans to use the proceeds to fund capital expenditures in connection with its Cobre Panama project and for general corporate purposes.

Bank of Nova Scotia firms

In the secondary market on Wednesday, the Bank of Nova Scotia's 1.375% senior notes due 2017 tightened to 72 bps bid, 70 bps offered, a trader said.

The Bank of Nova Scotia sold $1 billion of the five-year notes (Aa1/AA-/) on Tuesday to yield Treasuries plus 77 bps.

The financial services company is based in Toronto.

Trilogy Energy better

Trilogy Energy's 7¼% senior notes due 2019 (/B/DBRS: B) traded at 102 bid, 102.5 offered on Wednesday, according to a trader.

"It's been pretty quiet," a bond source said. "It's traded but not the whole time."

The company sold C300 million of the seven-year notes at par on Dec. 6.

Trilogy Energy is a Calgary, Alta.-based petroleum and natural gas-focused energy corporation.

Connacher flat

Also in the high-yield secondary market, Connacher Oil & Gas' 8¾% senior notes due 2018 (Caa2/B+/) fell 2 to 3 points to the low 70 area, a trader said.

The company sold C$350 million of the six-year notes on May 20, 2011 at par.

Standard & Poor's downgraded the company's corporate and existing bonds ratings on Dec. 6.

Connacher Oil and Gas is a Calgary, Alta.-based integrated oil company.

Andrea Heisinger and Paul A. Harris contributed to this review

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