Morning Commentary: Clarios withdraws offering of convertible preferreds; Ford in focus

By Abigail W. Adams

Portland, Me., July 29 – The one convertible bond issue expected over the course of the week, Clarios International Inc. canceled its proposed $500 million offering of three-year $50-par mandatory convertible preferred stock, which was slated to price on Thursday, due to market volatility, according to a company news release.

The mandatory preferreds had been talked with a dividend of 5.75% to 6.25% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

The books for the mandatory preferreds were heard to have been covered.

However, the deal was pricing concurrently with the Milwaukee-based car battery manufacturer’s initial public offering and investor appetite for IPOs has been waning, Bloomberg reported.

The targeted range for the Clarios’ IPO was $17 to $21.

With no new paper entering the secondary space for well over one week, stock moves remained the driving force of trading activity.

Ford Motor Co.’s 0% convertible notes due 2026 were in focus early in the session with the notes making large gains on an outright basis alongside stock.

The 0% notes were up 3 points outright with stock up about 5%.

They were changing hands at 109.5 versus a stock price of $14.58 early in the session, according to a market source.

There was more than $21 million in reported volume.

Ford’s stock traded as high as $14.79 after the opening bell before coming in slightly. It was changing hands at $14.44, an increase of 4.18%, shortly before 11 a.m. ET.

Stock jumped following the car manufacturer’s second-quarter earnings report.

Ford reported a profit of 13 cents per share versus analyst expectations for a loss of 3 cents. Revenue was $26.8 billion versus analyst expectations for revenue of $23 billion.

Ford also increased its full-year guidance.

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