New paper from RioCan, Telus, Honda Canada, Trilogy Energy better; Paramount flat in trading

By Cristal Cody

Prospect News, Dec. 7 - Canadian bonds priced over the week traded better on Friday as primary activity quieted, according to market sources.

"Nothing happened today," one syndicate source said. "Five deals yesterday, zero today."

Most of the new paper priced over the week traded better in Friday's secondary market, sources said.

Bank of Montreal's new 2.24% deposit notes due 2017 firmed 1 basis point on the day.

RioCan Real Estate Investment Trust's 3.716% senior debentures due 2021 traded in 5 bps on Friday.

Telus Corp.'s 3.35% senior notes came in more than 8 bps in the secondary market.

Honda Canada Finance Inc.'s 2.275% senior notes due 2017 tightened about 3 bps.

Trilogy Energy Corp.'s new seven-year senior notes that priced late on Thursday traded a point better on the day, a high-yield bond trader said.

Trading in Paramount Resources Ltd.'s new 7 5/8% notes due 2019 has been quiet.

"It hasn't really been trading that much," one trader said.

Activity in the Canadian high-yield bond market was light overall on Friday, according to market sources.

"There's a little bit of two-way, but it's been quiet," a source said.

The Markit CDX Series 18 North American high-yield index rose to 100.57 from 100.44.

The Markit CDX Series 18 North American investment-grade index firmed 1 bp to a spread of 97 bps.

Government bonds traded lower on better-than-expected job reports in Canada and the United States on Friday.

"Over the course of the week, there was a fairly persistent rally in government bonds and that was undone pretty quickly in the immediate aftermath of payrolls," said David Tulk, a strategist at TD Securities in Toronto.

Statistics Canada said in a report on Friday that employment rose by 59,000 in November, higher than the 10,000 rise expected. The unemployment rate fell 0.2% to 7.2%.

"Both Canada and the U.S. are looking at higher bond yields," Tulk said. "The Canadian survey was pretty strong. We're looking at the 10-year yield up almost 2 basis points in Canada and up about 4 in the U.S."

Canada's 10-year note yield ended the day 2 bps higher at 1.71%. The 30-year bond yield edged up 1 bp to 2.31%.

Bank of Montreal firmer

The 2.24% five-year deposit notes that Bank of Montreal (Aa2/A+/DBRS: AA) sold on Thursday traded 1 bp better on Friday at 99 bps bid, a source said.

Bank of Montreal sold C$1.5 billion of the notes at a spread of 99.9 bps over the Government of Canada benchmark.

The financial services company is based in Toronto and Montreal.

RioCan REIT tightens

RioCan Real Estate Investment Trust's 3.716% senior debentures due 2021 firmed 5 bps to 208 bps bid on Friday, according to a bond source.

The REIT sold C$250 million of the debentures (/BBB- expected/DBRS: BBB expected) at a spread of 212.7 bps over the government benchmark on Thursday.

Toronto-based RioCan REIT is Canada's largest real estate investment trust.

Telus stronger

Telus' 3.35% senior notes due 2023 (Baa1/BBB+/DBRS: A) priced on Thursday in C$500 million offering at 168.3 bps plus the benchmark, tightened to 160 bps bid on Friday, a bond source said.

The telecommunications company is based in Vancouver, B.C.

Honda Canada Finance better

Honda Canada Finance's 2.275% senior notes due Dec. 11, 2017 (A1//DBRS: A) traded going out on Friday at 99 bps bid, a source said.

Honda Canada Finance sold C$400 million of the five-year senior notes at par on Thursday at a spread of 102.9 bps over the Government of Canada benchmark.

The Honda Motor Co., Ltd. affiliate is based in Markham, Ontario.

Trilogy rises

Trilogy Energy's 7 ¼% senior notes due 2019 rose to 101.00 bid, 101.50 offered in the secondary market, a trader said.

The company sold C300 million of the seven-year notes (/B/DBRS: B) at par on Thursday.

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

Paramount Resources flat

Paramount Resources' 7 5/8% senior notes due Dec. 4, 2019 have traded mostly flat since the deal priced, going out at par to 100.50, according to a trader.

The company sold C$300 million of the seven-year notes (Caa1/B/) at par on Nov. 29.

Calgary, Alta.-based Paramount Resources is an oil and natural gas exploration, development and production company.

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