Morning Commentary: Carnival buoyed by earnings; Nexans eyes sustainability-linked notes

By Paul A. Harris

Portland, Ore., March 27 – Better-than-expected earnings from Carnival Corp. brought price improvements in the Miami-based cruise line's junk bonds on Monday morning, according to market sources.

The Carnival Holdings (Bermuda) Ltd. 10 3/8% senior priority notes due May 2028 were up ½ point on the morning at 106¾ bid, 107½ offered, according to a bond trader in New York.

On an otherwise quiet Monday morning that issue was relatively active, the source commented.

Meanwhile, the euro-denominated Carnival Corp. 10 1/8% senior secured second-priority notes due February 2026 were up a point or more, according to a market source in London.

The company, which posted a narrower-than-expected loss for the first quarter of 2023, generated revenues and adjusted EBITDA that beat analysts' estimates and saw a quarter-over-quarter occupancy rate increase of greater than 7%, the London source recounted.

Away from the headlines, the high-yield bond market was up ¼ of a point on Monday morning, the New York trader said.

With the S&P 500 stock index up 0.45% at mid-morning, the Shares iBoxx $ High Yield Corporate Bd (HYG) share price was essentially flat, up 0.03%, or 3 cents, at $73.63.

The DISH Network Corp. 11¾% senior secured notes due November 2027 (Ba3/B+), one of the new year’s benchmark issues, were up ¼ point at 92¾ bid, 93 offered, according to the trader.

The $1.5 billion deal, an add-on, priced at 102 on Jan. 17.

The dollar-denominated new issue market was quiet, with the active calendar empty as the final week of March got underway.

However, the European primary market generated news on Monday morning.

Paris-based cable and fiber optic supplier Nexans SA (BB+) was heard to be canvassing fixed income investors ahead of its inaugural sustainability-linked deal, expected to come in the form of a €325 million offering of five-year senior SLB notes, pending market conditions.

Fund flows

The dedicated high-yield bond funds sustained $369 million of net daily cash outflows on Friday, according to a market source.

High-yield ETFs saw $364 million of outflows on the day.

Actively managed high-yield funds sustained $5 million of outflows on Friday, the source said.

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