Forward calendar grows; Royal Caribbean gains; Peninsula Pacific rises; Gray Television comes in

By Paul A. Harris and Abigail W. Adams

Portland, Me., Oct. 13 – At the conclusion of the extended holiday weekend, dealers wasted no time in building a robust $3.2 billion forward calendar.

Rolls-Royce plc upsized its three-part multicurrency megadeal, which will include a $1 billion tranche of seven-year notes, with pricing expected Wednesday.

Freedom Mortgage Corp. is also on deck with a $500 million offering of 5.5-year senior notes (existing ratings B2/B-).

Meanwhile, the secondary space was largely unchanged on Tuesday as third-quarter earnings season begins.

Recent deals remained in focus.

While volume was relatively light, NorthRiver Midstream Finance LP’s 5 5/8% senior secured notes due 2026 (Ba3/BB) were trading with a slight premium to their discounted issue price.

Peninsula Pacific Entertainment LLC’s 8½% senior notes due 2027 (Caa1/CCC+) continued their upward momentum in active trading.

Gray Television, Inc.’s 4¾% senior notes due October 2030 (B3/B+/BB-) were trading off their highs in high-volume activity.

Outside of recent deals, Royal Caribbean Cruises Ltd.’s 5¼% senior notes due 2022 were making gains as the company worked to secure financing to take out its 2020 notes.

On deck

At the conclusion of the extended holiday weekend, dealers wasted no time in building a robust $3.2 billion forward calendar on Tuesday, all of its expected to clear ahead of Friday's close.

Rolls-Royce upsized its three-part multicurrency unsecured bullet megadeal (Ba3/BB-/BB+) twice: to £2 billion from £1.5 billion, following an earlier upsize from £1 billion.

A €750 million tranche of notes due February 2026 comes with updated talk in the 4 7/8% area, versus initial talk of 5% to 5¼%.

A £550 million tranche of notes due October 2027 comes with updated talk in the 6% area, versus initial talk in the 6¼% area.

A $1 billion tranche of notes due October 2027 also comes with updated talk in the 6% area, versus initial talk in the 6¼% area.

Pricing is set for Wednesday.

Also on deck for Wednesday, Freedom Mortgage plans to price a $500 million offering of 5.5-year senior notes (existing ratings B2/B-).

Initial talk is in the high 7% area (see related stories in this issue).

Meanwhile, word surfaced Tuesday on the DNEG plc (Prime Focus World NV) $375 million offering of secured notes (B2//BB), a deal that kicked off near the end of September, according to a bond trader.

Pricing underwent a steep climb.

Revised talk has the deal coming with a 9% coupon at a discount to yield in the 10% area, up from earlier guidance of 8¼% to 8½%, the trader said.

It could price this week.

NorthRiver at a premium

NorthRiver’s 5 5/8% senior secured notes due 2026 were trading with a slight premium to their discounted issue price on Tuesday.

The 5 5/8% notes were trading in the 99¾ to par context, a source said.

There was $10 million in reported volume during Tuesday’s session.

While the notes did not see much price movement, they were still trading at a premium to their issue price.

NorthRiver Midstream priced a $525 million issue of the 5 5/8% notes at 99.439 to yield 5¾% on Friday.

The yield printed at the wide end of the 5½% to 5¾% yield talk.

Peninsula Pacific up again

Peninsula Pacific’s 8½% senior notes due 2027 (Caa1/CCC+) continued their upward momentum on Tuesday.

The notes were changing hands in the 102 5/8 to 103 3/8 context throughout the session, a source said.

There was $17.5 million on the tape heading into the market close.

Peninsula Pacific is the owner and operator of gaming facilities, which include the Hard Rock Hotel & Casino Sioux City in Iowa.

Near-by Nebraska is currently set to vote on several gaming initiatives in November, which would open the state to casinos.

If passed, the legalization of gaming in Nebraska may pose consequences for Peninsula Pacific with competition increasing, a source said.

Gray active

Gray Television’s 4¾% senior notes due 2030 were active on Tuesday with the notes trading off their highs.

The bonds stood poised to close the day at par 5/8 after trading up to a 101-handle during Friday’s session.

There was more than $24 million of the bonds on the tape heading into the market close, making it one of the top traded issues of Tuesday’s session.

Royal Caribbean gains

Royal Caribbean’s 5¼% senior notes due 2022 were making gains in active trading as the cruise line operator worked to secure financing to take out its 2020 notes.

The 5¼% notes were up 1½ points to close Tuesday at 91, a source said.

There was more than $20 million in reported volume during the session.

The notes were making gains in active trading after Royal Caribbean announced a $1 billion capital raise.

The company plans to price a $500 million secondary equity offering and a $500 million convertible notes offering Tuesday night.

Proceeds will be used to take out the company’s 2.65% senior notes due Nov. 28, 2020.

With funding secured for the 2020 notes, investors were growing more confident in the cruise line operator’s ability to cover the 5¼% notes, which are the next in its capital structure to mature.

$304 million Monday inflows

The dedicated high-yield bond funds saw $304 million of daily net inflows on Monday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds saw $290 million of inflows on the day.

High-yield ETFS saw $14 million of inflows on Monday.

The funds saw $426 million of net inflows on Friday, the source said: Actively managed funds had $230 million of inflows on that day, while high-yield ETFS saw $196 million of inflows on Friday, according to the market source.

Indexes mixed

Indexes were mixed at the start of the week after all posted cumulative gains the previous week.

The KDP High Yield Daily index rose 7 basis points to close Tuesday at 66.79 with the yield now 5.41%.

The index posted cumulative gains of 57 bps on the week last week.

The ICE BofAML US High Yield index continued to climb higher after shooting past the 1% threshold last Friday.

The index gained 23.3 bps with the year-to-date return now 1.295%.

The index posted a cumulative gain of 128.2 bps on the week last week.

The CDX High Yield 30 index dropped 13 bps to close Tuesday at 106.16.

The index posted cumulative gains of 198 bps on the week last week.

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