Hurtigruten’s 3%-handle talk expands circle of interest beyond Scandinavian fixed income sphere

By Paul A. Harris

Portland, Ore., Jan. 30 – Hurtigruten Group AS is out with 3 3/8% to 3˝% initial talk on its €300 million offering of five-year secured notes (B2/B), which are non-callable for two years, according to market sources.

That 3%-handle talk, in a euro market that has seen nearly 60% of junk bond coupons year to date print in the 0s, 1s and 2s, sparked interest among European high-yield investors, who are typically disinclined to work on Scandinavian deals, a London-based sellside source told Prospect News.

That counts as a rare high coupon these days, the source remarked on Hurtigruten’s initial price talk.

The deal is in the market via a Scandinavian group of bookrunners: Denmark's Danske Bank, Norway's DNB, Finland's Nordea and Sweden's Carnegie.

And while some officials in the Scandinavian investment banks insist there is nothing whatsoever parochial about the deals they bring, others as far away as London and beyond, view them as a special class of high-yield offerings, away from the market's middle range, sources say, thus, the sobriquet “Scandinavian deal.”

However, in a time when some of the European benchmark sovereigns have negative yields, news of a bond that might yield in the mid-3% range travels.

Hurtigruten, a Tromso, Norway-based cruise ship operator, is in the high-yield market in order to raise cash that it will use to repay debt incurred in the acquisition of two new vessels.

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