Verint, Century Aluminum notes on tap; Pioneer Natural Resources active; JetBlue soars

By Abigail W. Adams

Portland, Me., April 5 – It was a slow return from the long weekend with the convertibles primary market launching two small offerings – a far cry from the rapid-fire pace of new deal activity seen in March.

Century Aluminum Co. plans to price $75 million of seven-year convertible notes and Verint Systems Inc. plans to price $250 million of five-year convertible notes after the market close on Tuesday.

However, the slowdown in the primary market was bolstering the secondary space, which saw another strong day on Monday – a combination of a strong day for equities and a shortage of new paper.

Equities continued to broach fresh records with the S&P 500 index closing the day at 4,077.91, an increase of 1.44%, and the Dow Jones industrial average closing the day at 3,3527.19, an increase of 373.98 points, or 1.13%.

The Nasdaq composite was also strong at the outset of the week, closing the day up 1.67%.

While the overall market was firm, activity was muted with European accounts on holiday.

There was $135 million in reported volume about one hour after the opening bell and $535 million on the tape heading into the market close.

It was the usual suspects dominating trading activity.

Ford Motor Co.’s 0% convertible notes due 2026 remained active with the notes continuing to gain on an outright basis.

JetBlue Airways Corp.’s 0.5% convertible notes due 2026 remained a bright spot among recent deals with the notes continuing to gain on an outright and dollar-neutral basis.

Pioneer Natural Resources Co.’s 0.25% convertible notes due 2025 were active early in the session as stock slid after the company announced a new multi-billion-dollar acquisition.

On deck

Century Aluminum plans to price $75 million of seven-year convertible notes after the market close on Tuesday with price talk for an initial conversion premium of 20% to 25%, according to a market source.

Price talk for a coupon has yet to be determined.

The company is pricing a concurrent $250 million offering of seven-year senior secured notes.

Price talk for the coupon and assumptions for the small offering were on hold until price talk for the concurrent offering of high-yield notes was established, a source said.

Initial talk for the high-yield notes was in the high 7% area.

Verint Systems plans to sell $250 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC (lead left) and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $37.5 million.

Ford gains

Ford’s 0% convertible notes due 2026 continued to improve on an outright basis on Monday.

The notes gained 1.5 points outright with stock up more than 4%.

The 0% notes were changing hands at 102.5 versus a stock price of $12.77 in the late afternoon, according to a market source.

There was about $20 million in reported volume during Monday’s session.

Ford’s stock traded to a high of $12.78 and a low of $12.33 before closing the day at $12.70, an increase of 4.35%.

In addition to a strong day for the market, Ford’s stock was given an extra boost by a Wells Fargo analyst who initiated coverage at outperform and gave Ford’s stock a price target of $15.00 due to the pace of the company’s turnaround, Investor’s Business Daily reported.

JetBlue’s new heights

JetBlue’s 0.5% convertible notes due 2026 remained a bright spot among recent deals with the notes continuing to gain momentum on an outright and dollar-neutral basis.

The 0.5% notes hit their highest outright level on Monday since their aftermarket debut on March 23.

The notes traded up to a 114-handle.

They gained 2.5 to 3 points dollar-neutral over the past week, a source said.

JetBlue’s stock traded to a high of $21.71 and a low of $20.92 before closing the day at $21.17, an increase of 3.93%.

JetBlue’s stock was posting gains after a Raymond James analyst upgraded the airline to outperform and set a price target of $24.00 for the stock.

Pioneer’s buying spree

While activity in the notes petered out heading into the afternoon, Pioneer Natural Resources’ 0.25% convertible notes due 2025 were active early in the session and trading off alongside stock after the company announced another multi-billion-dollar acquisition.

The 0.25% convertible notes were down about 2 points outright with stock off more than 7%.

The notes were changing hands at 155.25 versus an equity price of $155.38 early in the session, according to a market source.

They continued to trend lower as the session progressed and traded down to 154.375 in the early afternoon.

The notes were largely moving in line dollar-neutral, a source said.

Pioneer Natural Resources’ stock traded to a high of $157.26 and a low of $151.50 before closing the day at $152.18, a decrease of 7.5%.

Stock was selling off on Monday after the company announced last Friday it was acquiring DoublePoint Energy in a $6.4 billion cash-and-stock deal.

The acquisition is Pioneer’s fourth in as many months.

Mentioned in this article:

Century Aluminum Co. Nasdaq: CENX

Ford Motor Co. NYSE: F

JetBlue Airways Corp. Nasdaq: JBLU

Pioneer Natural Resources Co. NYSE: PXD

Verint Systems Inc. Nasdaq: VRNT

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.