Hurtigruten sets terms on €50M 3-year green bond deal

Norwegian cruise operator Hurtigruten has set pricing at 98 for its planned €50 million, three-year offering of 11% secured green bonds. Pricing is expected today via leads Danske Bank and DNB Markets.

Hurtigruten began investor calls Jan. 31 ahead of the potential deal, with a global call the morning of Feb. 1. The deal comes with a borrowing limit of €75 million and the bonds were previously guided at 97.5-98.

Proceeds from the transaction will fund green projects outlined in Hurtigruten's green bond framework, which was published in October 2021. The group attempted to issue a similar transaction in November 2021 in Norwegian kroner but was forced to postpone the deal due to weak market conditions, according to sources.

The deal follows a recently signed €75 million shareholder payment-in-kind, or PIK, loan that will sit subordinated to the new unsecured notes. TDR Capital is the group's largest shareholder with a nearly 81% stake, followed by Strawberry Equities with a nearly 12% stake.

As of December 2021, the group had total available liquidity of €73 million, including a €25 million term loan C signed that month. Fourth-quarter 2021 cash flow and EBITDA are expected to be negative due to the seasonal lull in the company's domestic market and the effects of travel restrictions as well as startup costs associated with reopening its operations.

The group's Hurtigruten Norway division — which operates coastal ferries in the company's domestic market — is currently in full operation. The group said it plans to have all eight of its Hurtigruten Exhibition ships in operation by April 2022.

Hurtigruten Group AS is rated CCC+/Caa1 on stable and negative outlooks, respectively.