Morning Commentary: New deals from Dominion Resources, Green Plains trade above par upon pricing

By Stephanie N. Rotondo

Seattle, Aug. 10 – New convertible issues from Dominion Resources Inc. and Green Plains Inc. were trading well early Wednesday.

Dominion priced $1.25 billion of 6.75% 2016 series A equity units on Wednesday. The $50-par paper traded up to 51 early in the session but was around 50.75 at midday, according to a trader.

The equity was also trending higher.

The $50-par units will initially be issued as 2016 series A corporate units holding a contract to purchase common stock and two 1/40 undivided beneficial ownership interests in 2% series A-1 and A-2 $1,000-par remarketable subordinated notes due 2021 and 2024, respectively.

The notes are subject to a remarketing beginning no earlier than May 13, 2019.

The purchase contract requires holders to purchase a variable number of common shares no later than Aug. 15, 2019. The reference price is $74.73, the closing price as of Aug. 9. The threshold price is $93.4056, an approximately 25% premium over the reference price.

Meanwhile, Green Plains came with $170 million of 4.125% senior convertible notes due 2022 via a Rule 144A private placement.

That issue was trading in a 102 to 103 range, a trader reported.

“Good volume,” he noted. “The old ones are not trading at all, which is not unusual. They rarely trade.”

The trader noted that the stock underlying the debt was “getting brutalized.”

It was off over 8.5% at midday.

The notes are convertible upon certain circumstances into cash, common stock, or a combination thereof, at the company’s option. Unless certain circumstances are met, the notes cannot be converted until March 1, 2022. The initial conversion rate is 35.7143 shares per each $1,000 of notes. That equals an initial conversion price of $28.00 per share, a 22.5% conversion premium over the Aug. 9 closing share price.

The occurrence of certain events could force the company to adjust the conversion rate.

Proceeds will be used for general corporate purposes, including the financing of a portion of the potential acquisitions of two ethanol plants affiliated with Abengoa Bioenergy.

© 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.