Synchronoss’ 0.75% notes dominate, trade above par; Empire State prices; MolyCorp mixed

By Stephanie N. Rotondo

Phoenix, Aug. 7 – A convertible bond trader said Synchronoss Technologies Inc.’s new 0.75% convertible senior notes due 2019 were dominating on Thursday.

“$100 million of the new issue has traded so far,” he said early in the session, adding that the total volume for the space at mid-morning was $140 million.

At that time, the trader placed the $200 million issue in a 103.5 to 104 range. However, the paper gave back a little bit by the end of business, as the trader saw the issue at 102.75.

The equity was meantime off 47 cents, or 1.22%, at $38.20.

The deal came via Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC early Thursday. Upon the maturity date, holders of the bonds can opt to convert the debt into equity at an initial conversion rate of 18.8072 common shares per each $1,000 of notes. That amounts to an initial conversion price of $53.17 per share and an initial conversion premium of 37.5%.

Price talk had been in a 0.75% to 1.25% range, with the conversion premium expected between 32.5% and 37.5%.

The Synchronoss deal wasn’t the only new issue to come out of the primary, though there was little goings-on in Empire State Realty Trust Inc.’s $250 million of 2.625% exchangeable senior notes due Aug. 15, 2019.

That issue priced late Wednesday via Goldman Sachs & Co.

The notes bear an initial exchange rate of 51.4059 shares of Empire State Realty Trust class A common stock per each $1,000 of notes. The exchange price is $19.45 per share, equaling an exchange premium of 22.5%.

Initial price talk was 2.125% to 2.625% with a conversion premium of 22.5% to 27.5%.

MolyCorp mixed, busy

MolyCorp Inc.’s 3.25% convertible notes due 2016 remained on the active side Thursday as investors continued to react positively to news out Wednesday regarding a new $400 million financing commitment from Oaktree Capital.

A trader pegged the convertible debt at 74.

The trader also placed the 5.5% convertible notes due 2018 at 61.875, which was about unchanged on the day.

As for the 6% convertible notes due 2017, they didn’t trade, the trader said, but he estimated they “should be 61.”

The stock closed up 31 cents, or 15.2%, at $2.35.

In the company’s straight bonds, the 10% notes due 2020 were seen falling over 2.5 points to 87.375 at one desk. Another trader said the issue “gave back yesterday afternoon’s gains, dropping from 90 all the way back to 87.”

The Greenwood Village, Colo.-based mining company said Wednesday that it had inked a $400 million financing agreement with funds managed by Oaktree Capital Management LP.

Under the terms of the deal, Oaktree will provide MolyCorp up to $400 million via credit facilities and the sale and leaseback of certain equipment located at the company’s Mountain Pass facility. A total of $250 million will be available as soon as the deal closes, while the remaining $150 million will be available until April 30, 2016, assuming MolyCorp meets financial and operational conditions.

Additionally, MolyCorp issued warrants equal to 10% of the company’s outstanding stock to the lenders.

The company did not disclose what it plans to do with the new funds.

Mentioned in this article:

Synchronoss Technologies Inc. Nasdaq: SNCR

MolyCorp Inc. NYSE: MCP

Empire State Realty Trust NYSE: ESRT

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