By Paul A. Harris
Portland, Ore., Aug. 15 – Royal Caribbean Group priced an upsized $1.25 billion issue of five-year senior notes (B3/B) at par to yield 11 5/8% in a Monday drive-by, according to market sources.
The issue size increased from $1 billion.
The yield printed at the tight end of the 11 5/8% to 11 7/8% yield talk and well inside of initial guidance in the low-12% area.
The deal was oversubscribed, with around $1.5 billion of orders at noon ET on Monday, according to an investor who participated.
Bondholders who elected to refinance upcoming maturities played a significant part in the transaction, the investor said.
The dealer had the new Royal Caribbean Cruises Ltd. 11 5/8% notes due August 2027 at par ¾ bid, 101½ offered at the Monday close, according to the investor, who added that away from the dealer the new notes were 101½ bid, 102¼ offered.
BofA Securities Inc. was the left bookrunner. Joint bookrunners were Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, HSBC Securities (USA) Inc., Mizuho Securities USA Inc., SG Americas Securities LLC, Skandinaviska, Truist Securities Inc., BNP Paribas Securities Corp., DNB Markets Inc. and Fifth Third Securities Inc.
The Miami-based cruise company plans to use the proceeds to make principal payments on debt maturing in 2022 and/or 2023. Pending such uses the company may temporarily apply the proceeds to repay its revolver or other borrowings.
The company’s most recent placement of high-yield bonds came on Jan. 4, 2022 when it priced $1 billion of 5 3/8% senior bullet notes due July 2027.
Monday's drive-by deal marks the seventh time that Royal Caribbean has raised cash in the junk bond market since the onset of the coronavirus pandemic in early 2020.
| Issuer: | Royal Caribbean Cruises Ltd.
|
| Amount: | $1.25 billion, increased from $1 billion
|
| Issue: | Senior notes
|
| Maturity: | Aug. 15, 2027
|
| Left bookrunner: | BofA Securities Inc.
|
| Joint bookrunners: | Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, HSBC Securities (USA) Inc., Mizuho Securities USA Inc., SG Americas Securities LLC, Skandinaviska, Truist Securities Inc., BNP Paribas Securities Corp., DNB Markets Inc. and Fifth Third Securities Inc.
|
| Co-managers: | Academy Securities Inc., DZ Financial Markets LLC, R. Seelaus & Co. Inc., PNC Capital Markets LLC and Regions Securities LLC
|
| Coupon: | 11 5/8%
|
| Price: | Par
|
| Yield: | 11 5/8%
|
| Spread: | 870 bps
|
| First call: | Aug. 15, 2024 at 105.813
|
| Trade date: | Aug. 15
|
| Settlement date: | Aug. 18
|
| Ratings: | Moody's: B3
|
| S&P: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 11 5/8% to 11 7/8%
|
| Marketing: | Drive-by
|
|
|
© 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.
