Royal Caribbean edges up in junkland; First Quantum, Cogeco move higher

By Cristal Cody and Paul A. Harris

Tupelo, Miss., Feb. 23 – The dollar-denominated high-yield primary market passed a quiet Friday.

The Feb. 19 week had $5 billion of new issuance, the leanest weekly total since the first week of the year.

Elsewhere, new issues represented the bulk of the day’s secondary trading with Royal Caribbean Cruises Ltd.’s new 6¼% senior notes due March 15, 2032 (Ba2/BB+) nearly ½ point better than issuance on more than $71 million of paper changing hands Friday.

First Quantum Minerals Ltd.’s existing paper gained in heavy trading over the session following its new offering Thursday of 9 3/8% five-year second-lien secured notes.

The 8 5/8% senior notes due 2031 were quoted up 1 1/8 points, while the 6 7/8% senior notes due 2027 traded 1/8 point higher on more than $70 million of volume.

Looking at new Canadian dollar junk issues, Cogeco Communications Inc.’s 6 1/8% senior notes due 2029 (BB+//DBRS: BB (high)) climbed ¾ point in the secondary market Friday.

Market tone was mixed by the day’s end.

The S&P 500 index rose 0.03%, while the Nasdaq declined 0.28%.

The iShares iBoxx High Yield Corporate Bond ETF added 5 cents, or 0.06%, to $77.35.

The benchmark 10-year Treasury note yield fell 6 basis points to 4.26%.

“Today was more like an un- day,” a trader said. “The market was somewhat firm.”

Royal Caribbean better

Royal Caribbean’s new 6¼% senior notes due 2032 (Ba2/BB+) went out nearly ½ point higher at a print of 100.438 on more than $71 million of notes traded by the close Friday, a source said.

The yield was 6.147%.

Royal Caribbean priced $1.25 billion of the notes on Thursday at par in an offering upsized from $1 billion and sold at the tight end of yield talk in the 6 3/8% area.

First Quantum improves

First Quantum Minerals’ 8 5/8% senior notes due 2031 traded up 1 1/8 points at 94 5/8 by the close on more than $56 million of volume Friday, a source said.

The company’s 6 7/8% senior notes due 2027 went out 1/8 point better at 95 7/8 by the time the dust settled on $16.5 million of volume.

On Thursday, First Quantum Minerals priced $1.6 billion of five-year second-lien secured notes (B/B) at par to yield 9 3/8%, 12.5 bps inside of the 9½% to 9¾% yield talk.

Cogeco moves up

Looking at other new junk issues, Cogeco Communications’ 6 1/8% senior notes due 2029 (BB+//DBRS: BB (high)) traded ¾ point better Friday and were closing at par 75, a source said.

The notes were priced off the investment-grade desk and “traded off the IG desk,” the source said.

The Montreal-based telecom announced Thursday that it sold C$275 million of the notes. The issue was priced at par, informed sources reported Friday.

Indexes

The KDP High Yield Daily index ended Friday at 50.54 with a yield of 6.9% compared to 50.48 with a yield of 6.91% on Thursday.

The index fell 7 bps on Wednesday and inched up 2 bps on Tuesday.

The CDX High Yield 30 index declined 10 bps Friday to 106.36.

The index had jumped 49 bps Thursday and shaved off 3 bps on Wednesday and 3 bps on Tuesday.

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