LONDON, May 8 (IFR) - Travelex's new issue traded down to a new low on Monday, following a troubled sale that saw the company tweak the deal's price, call features and covenant package to keep investors on board.
The €360m 8% 5NC3 senior secured bond, issued at par on April 27, opened the day at 98.765 to yield 8.477%, then slumped to 97.769 for a yield of 8.738%, according to Tradeweb data.
Since they were issued, the notes have mostly traded below par in the aftermarket.
The sale had been a tough one for the bureau de change operator, which ultimately had to extend the notes' call protection by a year to three and offer call premiums as high as 108, unusual in the high-yield market.
While price whispers were heard at 7% area, the notes priced at 8%, though a banker on the deal said the number was misinterpreted by the market and he had always anticipated a price in the high sevens.
The restricted payments covenant and permitted collateral liens definition were also amended, while other deals have seen investors largely ignore aggressive covenant packages that favour issuers.
Not all were entirely negative about the transaction, however, albeit guardedly.
“This deal wouldn’t have happened 18 months ago. There’s less and less people using Travelex. A deal like that should have come with a 10%-plus coupon, so fair play to them for getting it done at 8%," a banker off the deal had told IFR after the paper priced.
The bond's weak performance comes against a backdrop of robust performance by other notes that priced at the end of April alongside Travelex.
La Financiere Atalian's €600m 7NC3 senior bond is trading at a bid price of 102.550 to yield 3.471%, while Netflix's 10-year non-callable €1.3bn notes are trading at 102.239 to yield 3.388%, according to Tradeweb data. Atalian had priced at 4% and Netflix at 3.625%.
"That may have been supported by the French election result," the banker close to the Travelex deal said of Atalian, which is trading at its best since it was issued.
Senvion's 5.5NC2 senior secured bond is trading at a more modest bid price of 100.157 to yield 3.869%, according to Tradeweb data.
JP Morgan (B&D), Barclays and Bank of America Merrill Lynch were global coordinators on Travelex's deal, with Deutsche Bank and Goldman Sachs as joint bookrunners. (Reporting by Yoruk Bahceli; editing by Philip Wright)