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Discounted NorthStar trades up a little from issue; Airbus pricing convert; Micron drops, but improves on swap
By Rebecca Melvin
New York, June 26 – NorthStar Realty Finance Corp.’s new 4.625% stock-settlable notes traded a little bit above issue at 99.625 bid, 99.75 offered early Friday after the New York-based commercial real estate investment trust priced $300 million of the 18-month notes at 99.5% of par and beyond the cheap end of talk, a New York-based trader said.
The NorthStar issue, which gives the REIT the option to convert the notes into shares of its European unit pending a spin-off and listing of that unit, is essentially a straight bond that converts into stock at maturity, the trader said.
“It has 0% delta and no equity sensitivity,” he said.
The notes were trading somewhat actively.
Also expected to price later on Friday was a European deal by Airbus Group SE – the group’s first convertible. The issue was talked at up to €500 million of seven-year, 0% convertible bonds to be issued at 100% to 102% of par and with a 47.5% to 62.5% initial conversion premium.
The Airbus deal is a Regulation S offering.
Back in established issues, Micron Technology Inc. was trading down on an outright basis, but up on a dollar-neutral, or hedged, basis with shares of the Boise, Idaho-based chipmaker sharply lower.
The Micron 3% convertibles due 2043 were quoted at 94.75 versus an underlying share price of $20.50.
The Mircon bonds were up about a point on swap with the stock down 15%.
By mid-morning the shares were down $4.12, or 17%, to $19.90 after the company issued a sales forecast that missed estimates because of weaker demand for personal computers.
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