Morning Commentary: Liberty Media deal on tap; Cobalt stays busy but unchanged; Akamai at a premium

By Stephanie N. Rotondo

Seattle, Aug. 11 – Another large new issue was added to the convertibles calendar on Thursday as Liberty Media Corp. said it planned to privately place $425 million of senior debentures exchangeable for Time Warner Inc. stock.

Price talk on the Rule 144A deal is 2% to 2.5%, a market source reported. The initial exchange premium is expected to be 27.5% to 32.5%.

Morgan Stanley & Co. LLC is the bookrunner.

Away from new issues, a trader said Cobalt International Energy Inc.’s 2.625% convertible notes due 2019 continued to trade on the active side, though they remained “under 40.”

“They have sat at this level for like a week now, which is pretty amazing [considering] how much volume has traded,” he said.

The bonds got active – and pressured – last week after the company reported not only weak quarterly results, but also that a sale of its Angola properties had hit a snag.

Meanwhile, Akamai Technologies Inc.’s 0% convertible notes due 2019 were busy, a trader said.

However, there was no fresh news to act as a catalyst.

The trader also expressed surprise at the high premium at which the notes were trading. At 97.5, that equaled a nearly 70% premium, he said.

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