Ford, Realogy price junk bonds; calendar grows; secondary weak; Royal Caribbean comes in

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 5 – The Wednesday junk bond session got off to a promising start in the primary market, as two well-known issuers showed up with drive-by deals, while the first debut issuer of the year began a brief roadshow.

The release of minute notes from the Federal Reserve’s December meeting dampened enthusiasm in the primary and set the stage for a soft day in the secondary space with the cash bond market down ½ to ¾ point as Treasury yields spiked following the release.

The 10-year Treasury yield crossed the 1.7% threshold on Wednesday with minute notes indicating a possible rate increase by March.

While the cash bond market has held up well in the face of equity sell-offs throughout 2021, the markets were moving inline on Wednesday, marking a return to the status quo, a source said.

Royal Caribbean Cruises Ltd.’s 5 3/8% senior notes due 2027 (B2/B) gave back their gains and traded back down to par in high-volume activity.

The cruise line’s 5½% senior notes due 2028 were also losing steam in active trading.

Covanta Holding Corp.’s 4 7/8% sustainability-linked senior notes due 2029 were also down in active trading on Wednesday following Tuesday’s add-on.

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