As frantic as the equity new issue market was this week, and it was plenty busy, the stock jockey's can't keep pace with the incredible rush of fixed income financings hitting Canadian markets.
Wednesday saw the equity sales desks launch a $2.5-billion share sale for Manulife Financial, the second largest deal of a year that’s featured massive stock sales.
While impressive, the Manulife financing and other stock sales pale beside the volume of fixed income new issues, as $8-billion of new Canadian bonds were sold on Wednesday alone, and another $1.1-billion of new issues hit the market on Thursday.
The activity is rooted in low rates, which lure borrowers into the market, and strong investor interest in sqeezing extra income out of fixed income portfolios, which means shifting from cash and government debt into higher yielding (but riskier) corporate paper.
Here’s a quick summary of what’s placed out, as investment dealers, borrowers and investors did their thing ahead of what’s expected to be a quiet, holiday week. (And U.S. Thanksgiving might as well be a Canadian holiday, given the lackluster market activity expected for next Thursday and Friday. TD Waterhouse analyst Sheldon Dong compiled this list of who did what on Thursday:
- British Columbia sold $500-million of 10-year bonds with a 4.10 per cent interest rate. TD Securities led the underwriting.
- Westpac Banking Corp. sold $400-million of five year notes – a Maple bond offering. The debt carried a 3.75 per cent interest rate and the financing was led by TD Securities and Scotia Capital.
- EPCOR Utilities sold $200-million of 30 year bonds, a deal upsized from $150-millon and led by RBC Dominion Securities and Scotia Capital.
- The Regional Municipality of Waterloo borrowed $53.2-million by selling a series of debentures.
Activity on Wednesday started with the Bank of Canada auctions $3-billion of bonds that mature in 2015. The rest of the new issue traffic, drawn again from a report from TD Waterhouse, included:
- Canada Housing Trust sellng $3.975-billion of Canada Mortgage Bonds, in two financings, bot of which were led by BMO Nesbitt Burns, Bank of America/Merrill Lynch, RBC Dominion Securities and Scotia Capital.
- Nova Scotia sold $500-million of 10-year bonds in a transaction led by RBC Dominion..
- Quebec borrowed 200-million of Swiss francs in a medium term note sale that was led by Deutsche Bank and Royal Bank of Scotland.
- Insurer Intact Financial Corp. sold $150-million of 30-year bonds in an offering led by TD Securities and RBC Dominion Securities.
- Yellow Pages unit YPG Holdings sold $300-million of medium term notes that mature in 2020. The financing was upsized from $250-millionand led by RBC Dominion Securities, Scotia Capital and BMO Nesbitt Burns.
- Cascades Inc. did Canadian dollar and U.S. dollar-denominated debt issues, a variation from a company that’s traditionally borrowed in U.S. dollars. The paper maker sold $200-million of seven-year debentures in the domestic market and that financing was led by Scotia Capital, National Bank Financial, and Bank of America/Merrill Lynch.
Cascades also raised $500-million (U.S.) by selling debt that matures in 2017, and that underwriting was led by Bank of America/Merrill Lynch, Wells Fargo, Goldman Sachs and Scotia Capital.
