Convertible bond market firms; Dycom’s recent deal trades up; Extra Space Storage at par

By Stephanie N. Rotondo

Phoenix, Sept. 15 – The convertible bond market remained muted on Tuesday, though the overall tone was firm, according to one trader.

“Yesterday was dead quiet,” the trader said. “Today looks pretty quiet too. Everyone is just watching the market tick up and waiting for the Fed – if that’s a good excuse not to trade.”

Market players are keeping a watchful eye toward the Federal Reserve’s two-day policy meeting set to begin on Wednesday.

Still, Dycom Industries Inc.’s $420 million of 0.75% convertible senior notes due 2021 – a deal priced Sept. 10 – were seen moving up “maybe a quarter-point” to 104, according to one trader.

Another market source pegged the issue at 103.75, up half a point.

As for the company’s stock, it finished down 2 cents at $77.51.

Joint bookrunners were Goldman Sachs & Co. and BofA Merrill Lynch.

Extra Space Storage LP, a subsidiary of Extra Space Storage Inc., planned issuance of $500 million of 20-year exchangeable senior notes were seen at 99.5 bid, par offered in Tuesday’s gray market.

The stock was up $1.77, or 2.42%, at $74.82.

The new issue was slated to price after the market close Tuesday, but details were unavailable at press time.

The new notes were talked at a coupon of 2.625% to 3.125% and an initial exchange premium of 27.5% to 32.5%, according to market sources.

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