Viking Cruises drives by; Trinity joins calendar; Civitas active; Univar lower; TKC rises

By Paul A. Harris and Abigail W. Adams

Portland, Me., June 26 – Viking Cruises Ltd. priced Monday’s sole deal, a $720 million issue of eight-year senior notes (Caa1/B-) that came at par to yield 9 1/8% in a drive-by.

The yield printed at the tight end of yield talk in the 9¼% area.

That talk was wide of early whisper, which had the deal coming to yield 9% or tighter, a sellside source recounted, adding that at 9% bookbuilding was ultra-sluggish.

With the additional yield the bonds ended up playing to orders amounting to 2.5-times deal-size, the sellsider added.

However there was still some carping about the yield, on the part of some investors, according to the sellsider who added that some people who played the deal were highly confident that the bonds will be redeemed the minute call protection expires.

Meanwhile there was one deal announcement in the dollar-denominated market.

Trinity Industries, Inc. started a roadshow for a $400 million offering of five-year senior notes (Ba2/BB+/BB), in the market with initial price talk in the high-7% area, and set to price Thursday.

Elsewhere the temperature of the euro-denominated new-issue market is about to be tested, as Italian specialty chemicals manufacturer Polynt Group attempts to place €300 million of five-year senior secured notes, with proceeds plus balance sheet cash going to fund a dividend to shareholders.

Dividend financings are typically thought of as “hot market deals,” sources say.

Meanwhile, the secondary space saw a quiet start to the week with the cash bond market either side of unchanged after pulling back from the previous week.

New issues remained in focus with recent deals following different trajectories in the secondary space.

Civitas Resources, Inc.’s two tranches of senior notes (B1/BB-/BB-) continued to see active trade although with little movement in price.

Windsor Holdings III, LLC’s 8½% senior secured notes due 2030 (B2/B+) backing the buyout of Univar Solutions Inc. continued to struggle with the notes breaking below a 99-handle.

Viking Cruises’ 7% senior notes due 2029 (Caa2/B-) were boosted by the company’s latest refinancing deal.

TKC Holdings, Inc.’s 10½% senior notes due 2029 (Caa2/CCC) were among the largest gainers of Monday’s session, rising 2 points in active trade.

Civitas active

Civitas’ recently priced tranches remained active in secondary market activity although with little movement in price.

The 8¾% senior notes due 2031 and 8 3/8% senior notes due 2028 both closed Monday wrapped around 101, according to a market source.

Reported volume for both tranches was about $22 million.

The 8¾% notes and 8 3/8% notes have put in a strong performance in the aftermarket since pricing at par on June 22.

Univar weaker

Univar’s 8½% senior secured notes due 2030 continued to struggle in the aftermarket, breaking below a 99-handle in active trade on Monday.

The 8½% notes were off ¼ to 3/8 point.

They were changing hands in the 98¾ to 99 context heading into the market close, according to a market source.

There was $12 million in reported volume.

The 8½% notes, which priced at par, have struggled since breaking for trade, falling to a 99-handle out of the gate.

Viking rises

Viking Cruises’ outstanding notes were boosted by the company’s latest refinancing deal.

Viking’s 7% senior notes due 2029 climbed ½ to ¾ point in active trade.

The notes were changing hands in the 92¼ to 92½ context heading into the market close, according to a market source.

The yield was about 8¾%.

There was $13 million in reported volume.

While less active, Viking’s 5 5/8% senior secured notes due 2029 (B2/B+) jumped 1½ points to close Monday at 90¼%, a source said.

The yield was about 7¾%.

Proceeds from Viking’s latest deal will be used to take out the company’s 13% senior secured notes due 2025, which was a boon to the credit, a source said.

TKC Holdings gains

TKC Holdings’ 10½% senior notes due 2029 were the largest gainers in a relatively flat session.

The 10½% notes jumped 2 points in active trade.

They were changing hands in 75½ to 76 context during Monday’s session.

The yield was about 17 1/8%.

There was $6 million in reported volume.

The food services company for correctional institutions’ 10½% notes had been on a steady uptrend since a post-earnings sell-off in mid-May.

The notes dropped down to a 63-handle following disappointing numbers but have since recouped losses and are now trading at a higher level than before earnings were announced.

The company announced its intention to raise prices due to declining numbers, which may have sparked some buying interest in the notes, a source said.

Indexes

The KDP High Yield Daily index added 6 points to close Monday at 50.34 with the yield now 7.44%.

The index posted a cumulative loss of 49 points on the week last week.

The ICE BofAML US High Yield index gained 4 basis points with the year-to-date return now 4.608%.

The index posted a cumulative loss of 84.3 bps on the week last week.

The CDX High Yield 30 index closed Monday down 29 bps at 101.15.

The index posted a cumulative loss of 107 bps on the week last week.

Fund flows

High-yield ETFs sustained $114 million of daily cash outflows on Friday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds were flat on the day, posting $2 million of inflows on Friday, the source said.

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