By Abigail W. Adams
Portland, Me., Dec. 12 – The year is drawing to a close but the final numbers for new issuance in 2017 is still to be determined with activity continuing in the primary market.
Bristow Group Inc. announced Tuesday evening it plans to price $125 million in convertible notes due 2023 after the market closes on Wednesday.
Price talk is for a coupon of 4.25% to 4.75% and an initial conversion premium of 22.5% to 27.5%, according to a market source.
Barclays Capital Inc. and Credit Suisse Securities LLC are bookrunners. The deal carries an $18.75 million greenshoe.
Cowen Inc.’s newly priced $120 million in five-year convertible notes with a coupon of 3% and a 25% initial conversion premium made large gains in early trades Tuesday although not many of the notes are expected to appear in the secondary market.
General Cable Corp.’s 4.5% convertible notes due 2029 remained in focus and gained strength during Tuesday’s session more than a week after Prysmian SpA’s acquisition of the company was announced.
NXP Semiconductors NV’s 1% convertible notes due 2019 saw some action and made some gains during Tuesday’s session. NXP has been caught in the boardroom drama involved in Broadcom’s hostile take-over attempt of Qualcomm, which in turn is in the process of acquiring NXP.
Intel Corp.’s 2.95% convertible notes due 2035 continued to shuffle around during Tuesday’s session in the run up to the notes’ redemption. The notes have slowly lost strength as the call date of Dec. 18 approaches.
The notes hit a low of 159.5 before ending the day on a high of 161.606, according to Trace data. Holders plan on converting the notes on Dec. 15 to not lose out on the coupon payment. The notes will be redeemed at par plus accrued interest on Dec. 18.
Intel’s stock ended the day at $43.33, a decrease of 0.76%.
Cowen’s new notes
Cowen priced $120 million in convertible notes due 2022 late Monday with a coupon of 3% and an initial conversion premium of 25%. Cowen and Nomura Securities International Inc. are joint bookrunners for the deal, which carries a greenshoe of $15 million.
The 3% convertible notes due 2022 were at 102.75 bid, 103.5 offer with a stock price of $13.90 in early morning trades, according to a market source.
There was tight allocation for the offering and not many notes are expected to trade in the secondary market, a market source said.
Cowen anticipates $116.4 million in proceeds from the Rule 144A deal, or $130.95 million if the greenshoe is exercised.
Proceeds will be used to repurchase $115.14 million of Cowen’s 3% cash convertible notes due 2019 and $19.5 million of class A common stock from purchasers of the notes in privately negotiated transactions, according to a company release.
Cowen’s currently has $149.5 million outstanding in the 3% cash convertible notes due 2019. The 3% notes due 2019 were trading at 102.5 early Tuesday, according to Trace data.
Cowen stock ended the day at $14.6, an increase of 5.04%.
More cable
General Cable’s 4.5% convertible notes remained in focus and gained strength during Tuesday’s session more than a week after news broke the cable maker would be acquired by Milan, Italy-based cable manufacturer Prysmian.
After solidifying around 105 last week, the notes have found a new home in the 106 range. The notes were trading between 105.949 and 106.5 before ending the day at 106.310, according to Trace data.
S&P placed General Cable’s B corporate rating on credit watch with positive implications on Monday due to the buyout. Prysmian has a better credit profile and will repay General Cable’s debt in full when the buyout is complete.
However, the heavy volume trading of the notes is not expected to last much longer.
“That will dry up soon enough,” a market source said. General Cable stock ended the day flat with Monday’s close at $29.80.
NXP stands alone
NXP Semiconductors’ 1% convertible notes due 2019 saw some action and some gains during Tuesday’s session.
The 1% notes were trading in the 123.392 to 123.761 range before ending the day at 123.656, according to Trace data. The notes were in the 120 to 122 range last week. NXP stock was down slightly at market close at $115.64, a decrease of 0.17%.
The company’s 1% convertible notes and equity are holding their own amid Broadcom’s hostile takeover effort of Qualcomm, which in turn is in the process of acquiring NXP.
However, hedge fund Elliot Management recently proclaimed its belief NXP would be worth $135 per share if not for the pending merger with Qualcomm.
Qualcomm’s $38 billion buyout of NXP for $110 a share, initiated in 2016, has long been delayed due to scrutiny from European antitrust regulators.
With NXP equity trading above Qualcomm’s offer price, there is speculation that Qualcomm will have to up its offer price for NXP if the deal is to go through.
Meanwhile Qualcomm is itself the subject of an acquisition attempt and is currently trying to thwart Broadcom’s unsolicited $130 billion takeover bid at $70 a share, which Qualcomm has said undervalues the company.
Broadcom has launched a boardroom battle to force the deal by nominating 11 dissident directors to Qualcomm’s board for the company’s 2018 annual meeting.
Mentioned in this article:
| Bristow Group Inc.: | NYSE: BRS
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| Cowen Inc.: | Nasdaq: COWN
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| General Cable Corp.: | NYSE: BGC
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| NXP Semiconductors NV: | Nasdaq: NXPI
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| Intel Corp.: | Nasdaq: INTC
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