Carnival deal wraps high-volume January; secondary weakens; Air Products firms on few trades

By Aleesia Forni and Andrea Heisinger

New York, Jan. 31 - Carnival Corp. closed out a record-setting month of January with a benchmark-sized sale of bonds on Thursday.

The cruise line operator priced $500 million of three-year senior notes that are guaranteed by parent company Carnival plc.

A source said that Inter-American Development Bank sold $500 million of three-year floating-rate notes, but the terms of the trade were unavailable at press time.

A $500 million sale of floating-rate notes due 2015 was priced by Province of Ontario.

Thursday marked the end of a record month of issuance for January, a market source said, although the source added that hard numbers for the month were not yet available from syndicate desks.

February should get off to a robust start as companies unable to price during the past couple of weeks due to earnings blackouts tap the market while interest rates remain low and while the market's tone is favorable.

There is $65 billion to $70 billion of bond issuance expected for February, the market source said.

The secondary market saw spreads widen on Thursday, with one market source commenting that the earlier part of the session felt "a little weaker."

Meanwhile, there were "not many trades" on Air Products and Chemicals Inc.'s recent deal. One market source saw the notes "around" 67 basis points bid.

A trader had quoted the $400 million offering of 2.75% 10-year senior notes 6 bps better at 72 bps bid, 67 bps offered earlier in the session.

The Allentown, Pa.-based industrial gas and chemicals maker priced the notes to yield Treasuries plus 78 bps on Wednesday.

Carnival prices tight

Carnival was in the market with a $500 million offering of 1.2% three-year senior notes (A3/BBB+/) priced at 80 bps over Treasuries, a source close to the trade said.

A source said that a do-not-grow provision was put on the size. Pricing was at the low end of talk in the 85 bps area, plus or minus 5 bps.

The sale is guaranteed by Carnival plc.

The bookrunners were Bank of America Merrill Lynch, Goldman Sachs & Co. and HSBC Securities (USA) Inc.

Proceeds are being used to repay two floating-rate debt facilities, one in whole, one in part, maturing through 2022 and 2023. Each has an interest rate of Libor plus 160 bps.

The issuer is a Miami-based unit of London-based cruise operator Carnival plc and was last in the market with a $500 million sale of five-year notes on Nov. 29.

Ontario plans floaters

The Province of Ontario has sold $500 million of floating-rate notes due 2015 (Aa2/AA-/) at par to yield Libor plus 5 bps, according to an FWP filing with the Securities and Exchange Commission.

The bookrunners were Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

© 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.