(Bloomberg) -- Cineplex Inc., Canada’s largest chain of movie theaters, is tightening the yield it’s offering through its unrated bond sale after seeing strong demand from investors seeking to play the economic recovery trade.

The company plans to issue C$250 million ($196.5 million) of second-lien secured senior notes due 2026 to yield 7.5% to 7.75%, according to people familiar with the matter. That compares with preliminary discussions with investors yesterday for 8% to 8.25%, said the people, who asked not to be named before the deal is completed. Bookrunners had gathered around C$1 billion in preliminary indications of interest as of Thursday.

The transaction comes as investors worldwide are positioning for a post-pandemic reopening as countries execute Covid-19 vaccination campaigns. Investors are piling into the deal even though Canada has an additional layer of uncertainty because its vaccination effort is lagging most key Western economies, according to data compiled by Bloomberg.

Earlier this month, Cineplex said it was planning to raise a minimum C$200 million by selling bonds by the end of March to meet conditions for a covenant waiver agreed to with its existing lenders, according to a Feb. 8 statement.

The yield investors demand to hold high-risk bonds was at 3.36% Thursday up from 3.27% Wednesday and 3.21% a day earlier, the lowest on record, according to the ICE BofA Canada High Yield Index data going back to early 2001. Even as Cineplex has continued to burn cash in recent months amid more lockdowns, its C$250 million of convertible bonds first issued at par in July have rallied to trade at around 128 Canadian cents on the dollar, according to data compiled by Bloomberg.

Bank of Montreal and Scotiabank are managing the bond sale.

(Updates with the guidance level in second paragraph and adds additional details starting in third paragraph.)

©2021 Bloomberg L.P.