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Morning Commentary: Wednesday’s deals active in Thursday trading; Cobalt ticks up after debt deal
By Stephanie N. Rotondo
Seattle, Dec. 8 – New convertible bond deals that priced on Wednesday continued to be in focus in early Thursday dealings.
The midweek session saw three issues hitting the tape, a $750 million issue of 3% exchangeable senior notes due 2024 from Ensco plc, a $400 million sale of 1.25% senior convertible notes due 2023 from Teradyne Inc. and a $400 million issue of 2% convertible senior notes due 2021 from Zillow Group Inc.
At mid-morning, trading in those three issues made up almost half of the total trading volume, a trader noted.
The issues also continued to trade well. Each of them pushed above par upon pricing.
In Ensco, the notes were pegged at 104. The underlying equity (NYSE: ESV) was up 9 cents at $10.01.
Teradyne’s paper was then seen in a 105.75 to 106.25 context. Its stock (NYSE: TER) was also faring well in early trading, rising 75 cents, or 2.96%, to $26.27.
As for Zillow, the convertibles were up, even as the common shares declined.
A trader quoted the issue at 102.5 bid, 103 offered. The class C stock (Nasdaq: ZG) was off 28 cents at $37.84.
Away from new issues, a trader said Cobalt International Energy Inc.’s convertibles were “on the list.”
He noted that the paper hasn’t traded much in the last few days.
Thursday’s activity in the name came after the company said it had completed a debt exchange and financing transaction. The exchange took out about $712.4 million of the 2.625% convertible notes due 2019 and 3.125% convertible notes due 2024.
The convertibles that remain outstanding were inching upward in trading, though the stock was trading off.
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