Auto names trade around at slightly stronger levels in pre-holiday market

By Sara Rosenberg

New York, July 2 - Ford Motor Co. and General Motors Corp.'s convertibles traded around at slightly higher levels after Thursday's loss in an otherwise quiet pre-holiday market.

"There's not going to be anything going on today. We have a lot of people that didn't even come in," an analyst said.

"We've been trading some of the autos," a trader said. "They're such big issues [all in the billions] that just by virtue of their size they trade everyday. They are three of the 10 biggest issues in the U.S. And they trade more like stock because they're listed."

Ford's convertible preferred closed at $53.45, up $0.10 or 0.19% with the level ranging from $53.18 to $53.82 during the day. The stock closed at $14.95, down $0.07 or 0.47%.

General Motors' 6.25% GPM convertible due 2033 closed at $28.68, up $0.03 or 0.10% and ranged from $28.48 to $28.70 throughout the day. The 5.25% GBM convertible due 2032 closed at $24.54, up $0.03 or 0.12% and ranged from $24.44 to $24.6381 throughout the day. While the company's stock closed at $45.24, down $0.24 or 0.53%.

On Thursday both Ford and General Motors fell off as the two companies reported a decline in June sales compared to last year. Although the numbers were not necessarily unexpected, the news was enough to move the issues.

Ford's overall June sales were down 7.7% compared to June 2003 with 287,381 vehicles sold. Year-to-date through June, the company's sales were 1.7 million, down 3% compared with the same period a year ago.

Ford is a Dearborn, Mich. automotive and financial services company.

General Motors' June sales were down 15% from the same period last year as the company sold 380,267 new cars and trucks. Total sales through June were up 1.0%.

GM is a Detroit, Mich. vehicle manufacturer.

CapitalSource trades higher

CapitalSource Inc.'s new 3.5% convertible headed higher Friday, with the paper quoted at par ¼ bid, par ¾ offered and trades taking place at the par ½ level, according to a trader.

On Thursday, in its first day of trading, the convertible was quoted around par bid, par ½ offered pretty much throughout the day.

The deal was first announced late day Wednesday, at which time the company said it would sell $300 million of convertible senior unsecured notes due 2034 under Rule 144A with proceeds earmarked for the repayment of outstanding indebtedness and for general corporate purposes.

Price talk never surfaced on the new convertible.

The Chevy Chase, Md. commercial finance company's deal sold at par to yield 3.5% with a 30% initial conversion premium via lead manager Citigroup.

Although some said the deal was oversubscribed and liked well enough that pricing terms did not have to be changed in order for it to get done, others had some complaints with the lack of anti-takeover language in the deal.

But, everyone did agree that final pricing was pretty attractive.

A $30 million greenshoe is available on the CapitalSource deal.

The convertible is non-callable for seven years with puts in year seven, 10, 15, 20 and 25.

© 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.