New Citrix adds as shares slip; Tesla down with shares; LifePoint active ahead of maturity

By Rebecca Melvin

New York, April 25 - Citrix Systems Inc.'s newly priced 0.5% convertibles traded up out of the chute on Friday after the Fort Lauderdale, Fla.-based cloud computing solutions company priced $1.25 billion of the five-year senior notes at the midpoint of talk late Thursday, market sources said.

The Citrix 0.5% bonds were last seen at 100.375 bid, 100.635 offered with the shares down nearly 1%, a New York-based trader said.

Elsewhere, trading was quiet as stocks fell, led by technology names.

Tesla Motors Inc.'s three convertible bonds were active. Tesla's 1.25% convertibles due 2021, or the B tranche, fell nearly 2 points to 89.25 bid, 89.5 offered. The two other Tesla bonds were also under pressure in trading. Tesla shares fell $8.00.

LifePoint Hospitals Inc. was active after the Brentwood, Tenn.-based rural hospital owner and operator reported earnings that sent its underlying shares up 6%, a report that came ahead of the convertible's upcoming maturity May 15.

New Citrix adds

Citrix's 0.5% bonds were seen at 100.5 bid, 101 offered with the underlying shares down fractionally in the early going, a syndicate source said.

The bonds ended at about 100.375 bid, 100.635 offered with the shares down nearly 1%, a New York-based trader said.

Citrix shares were last down 58 cents, or nearly 1%, at $59.42. Earlier in the session they were seen down fractionally, or at one point down 14 cents, or 0.23%, at $59.86.

"They were higher out of the gate, wrapped around par to 100.75," the syndicate source said, adding that action had slowed by late morning.

The bonds were allocated to hedged and outright players on about a 50:50 basis. They were seen on a 51.6% hedge on swap, a New York-based trader said.

Citrix priced $1.25 billion of five-year convertible senior notes at par to yield 0.5% with an initial conversion premium of 50%. Pricing of the Rule 144A deal came at the midpoint of talk for a 0.25% to 0.75% coupon and a 47.5% to 52.5% premium.

The deal has a $187.5 million greenshoe and was sold by joint bookrunners J.P. Morgan Securities LLC, Goldman Sachs & Co., BofA Merrill Lynch and RBC Capital Markets LLC.

The bonds are non-callable for life with no puts. They have takeover protection and net-share settlement.

The deal also came with a bond hedge. The strike price on the warrant transactions is $120.00 per share, which boosts the initial conversion premium from the issuer's perspective to 100%.

About $71.8 million of proceeds will be used to pay the net cost of the bond hedge. Remaining proceeds are earmarked to help repurchase $1.5 billion of shares.

Citrix intends to use about $101 million to purchase shares from certain purchasers of notes in privately negotiated transactions with one of the underwriters concurrently with the closing of the notes. The rest of the $1.4 billion-share repurchase will be effected through an accelerated share repurchase transaction, which Citrix plans to enter into with a financial institution between pricing and closing the notes offering.

Tesla Bs trading in 89 area

Tesla's 1.5% convertibles due 2021 traded down nearly 2 points to 89.25 bid, 89.5 offered with the underlying shares down $8.00 or nearly 4%.

That was back down to near the bond's lows notched in early April at around 88. In the interim, the bonds had recovered to the 96 level.

Also seen trading, the Tesla 0.25% convertibles due 2019, or the As, traded down 0.75 point to about 91.75 in what appeared to be less activity, compared to 92.5 at the end of Thursday.

Tesla's more established 1.5% convertibles due 2018 printed at 173.56, which was down 6.3 points on the day, according to Trace data.

Tesla shares ended down $8.01, or 3.9%, at $199.85.

Mentioned in this article:

Citrix Systems Inc. Nasdaq: CTXS

LifePoint Hospitals Inc. Nasdaq: LPNT

Tesla Motors Inc. Nasdaq: TSLA

© 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.