Over the past year bonds hit hard by COVID-19 have rallied and rewarded investors who took a gamble. One prime example is cruise company Carnival Corporation (NYSE:CCL) which pawned ships to borrow around $4 billion from investors asking an 11.5% interest rate. Interestingly, the yield on the binds has dropped below 4% as bonds increase in value.
Carnival Bond buyers have enjoyed massive returns
The cruise operator is still burning $600 million each month with the ships pawned as collateral for the bond still docked as the company awaits the lifting of the ban on cruises in the US. Notably, these bond buyers and debt issued by airlines and cinema chains have received huge returns in the past year with economic recovery taking root.
Capital Group portfolio manager Shannon Ward, who invested in several bonds issued at the time and holds 10% of the Carnival bonds, says that it is astonishing. He said that in April last year, there were several questions regarding how such companies could make it. He added that bond issuance in the wake of the uncertainty meant putting a heavy coupon on it, which was challenging at the time. US high yield has so far returned over 23% in the past year and more than erased the massive loss from last year’s selloff.
Pacific Life to issue Sustainable Bonds
Pacific Life has introduced a Sustainable Bond Framework under which it will issue Sustainable Bonds via its Institutional Division’s Capital Markets Group. The company’s Institution Division’s head Brian Woolfolk said that the mission is delivering superior risk-adjusted investments offering scalable and value-added solutions to clients. He said that the company continues to generate sustainable long-term returns responsibly to reflect ESG principles and align with Pacific Life’s core values. The company is expanding efforts to impact the environment, community, and underserved through the framework.
Joe Krum, Institutional Capital Markets Group VP and Managing Director at Pacific Life, said that community is among the core values of the company. He said that the framework offers an opportunity to expand the depth and breadth of the company’s sustainable activities by financing existing and future investments that can make a positive social and environmental difference in the world.
Santhera begins convertible bond exchange offer
Santhera Pharmaceuticals has offered an update regarding the restructuring of the CHF 60 million convertible bonds and options for bondholders to choose. As of April 6, 2021, Santhera’s outstanding CHF 60 million 5% Convertible Bonds due 2022 holders can accept the exchange offer the company had announced on March 25, 2021. Most importantly, the exchange is acceptable until April 19, 2021, unless the company extends its.
The company will publish the exchange offer’s interim result on April 20, 2021, and if the company will consider the exchange offer successful, then the additional acceptance period will commence on April 21, 2021, up to April 27, 2021. Also, the company seeks to get consent for the restructuring of the 2017/22 Bonds as proposed on March 8, 2021.