Morning Commentary: Air Transport plans sale of seven-year convertibles; Aerojet descending

By Stephanie N. Rotondo

Seattle, Sept. 25 – A new convertible bond issue was added to the calendar early Monday.

Air Transport Services Group Inc. said it was selling $200 million of convertible senior notes due 2024 via a Rule 144A offering.

Price talk is for a 1.25% to 1.75% yield and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc. are the bookrunners.

The deal is expected to price after Monday’s close. Ahead of pricing, the company’s stock (Nasdaq: ATSG) was down 80 cents, or 3.14%, at $24.50.

The new convertible issue will mark the company’s first entry into the market.

Proceeds will be used, in part, to pay down a revolving credit facility.

Meanwhile, Aerojet Rocketdyne Holdings Inc.’s 2.25% convertible notes due 2023 were slightly weaker in early trading, as was its underlying equity (NYSE: AJRD).

A trader called the convertibles down over one-eighth of a point at 145.345. The stock was meantime down 12 cents at $33.77.

However, there was no fresh news out on the Redmond, Wash.-based aerospace company.

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