German cruise line operator t set out plans on Tuesday to launch a 300 million euro ($360.1 million) bond sale, just as European authorities begin to chart a route back towards opening up the travel sector.
TUI Cruises, part-owned by loss-making travel company TUI, is looking to sell a 300 million euro, five-year bond in the coming days that will fund cash on its balance sheet, according to a lead manager memo seen by Reuters.
Both the European Union executive and British authorities have talked up the prospect of easing COVID-19 travel restrictions in the coming weeks, hoping to boost the stricken tourism industry this summer.
“With the news coming from the EU yesterday and the U.S. cruises sector in April, this could be perfect timing for TUI Cruises,” said a high-yield bond investor who preferred to remain unnamed.
The U.S. Centers for Disease Control and Prevention (CDC) last week announced new steps to speed up approvals for the resumption of cruise industry passenger operations in the United States by mid-summer.
Initial price thoughts on the bond, which the issuer can redeem after two years, are in the area of 7%, according to the memo.
TUI Cruises, which is 50% owned by TUI AG and Royal Caribbean Group each, will hold a global investor call at 1100 GMT on Tuesday and will be available for virtual investor meetings through Thursday, the memo said.
TUI itself was last in the bond market in April, when it issued 400 million euros of convertible bonds.
TUI Cruises has hired JP Morgan and BNP Paribas to lead the sale, alongside Citi, Commerzbank, Credit Agricole, DZ Bank and UniCredit for the sale, according to the memo.
($1 = 0.8331 euros) (Reporting by Yoruk Bahceli and Abhinav Ramnarayan; Editing by Jan Harvey)
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